LVTFan's Blog

Henry George's teaching in a nutshell

Henry George's teaching in a nutshell: To deprive men of the power to take what belongs to others.

-- From The Beacon, an Australian Single Tax journal, quoted in "The New Earth," (1899)

The Earth-for-All Calendar: April 30

Place one hundred men on an island from which there is no escape, and whether you make one of these men the absolute owner of the other ninety-nine, or the absolute owner of the soil of the island, will make no difference either to him or to them.

— HENRY GEORGE, Progress and Poverty, Book VII., Chap. 2, p. 312.

Bob Andelson: The Earth is the Lord's!

I've taken some liberties with the formatting, because sometimes bullet points help ... you can find the original in the online library at http://schalkenbach.org/  I was fortunate enoguh to meet Bob

The Earth is the Lord's

by Robert V. Andelson
Professor Emeritus of Philosophy,
Auburn University, Auburn, Alabama

George Bernard Shaw, in a letter written in 1905 to Hamlin Garland, describes how, more than twenty years earlier, he had attended Henry George's first platform appearance in London. He knew at once, he said, that the speaker must be an American, for four reasons:

• "Because he pronounced 'necessarily' . . . with the accent on the third syllable instead of the first;
• because he was deliberately and intentionally oratorical, which is not customary among shy people like the English;
• because he spoke of Liberty, Justice, Truth, Natural Law, and other strange 18th-century superstitions; and
• because he explained with great simplicity and sincerity the views of the Creator, who had gone completely out of fashion in London in the previous decade and had not been heard of there since."

George's magnum opus, Progress and Poverty (the centenary of which occurred in 1979), is characterized by the same moral and religious emphasis remarked by Shaw in its author's London lecture, an emphasis that rises in the final chapter to the noble declaration of a faith revived. It is, I think, therefore entirely appropriate that I focus today on the moral and religious aspects of his basic proposal for economic reform — his proposal to lift the burden of taxation from the fruits of individual labor, while appropriating for public use the socially-engendered value of the land.

For land value taxation is

• not just a fiscal measure (although it is a fiscal measure, and a sound one);
• not just a method of urban redevelopment (although it is a method of urban redevelopment, and an effective one);
• not just a means of stimulating business (although it is a means of stimulating business, and a wholesome one);
• not just an answer to unemployment (although it is an answer to unemployment, and a powerful one),
• not just a way to better housing (although it is a way to better housing, and a proven one);
• not just an approach to rational land use (although it is an approach to rational land use, and a non-bureaucratic one).

It is all of these things, but it is also something infinitely more: it is the affirmation, prosaic though it be, of a fundamental spiritual principle — that "the earth is the Lord's, and the fulness thereof."

It is the affirmation of the same principle to which Moses gave embodiment in the institution of the Jubilee, and in the prohibition against removing ancient landmarks, and in the decree that the land shall not be sold forever. It is the affirmation of the same principle to which the prophets of old gave utterance when they inveighed against those who lay field to field, and who use their neighbor's service without wages. It is the affirmation of the same principle to which Koheleth gave voice when he asserted in the fifth chapter of Ecclesiastes that "the profit of the earth is for all."

The earth is the Lord's! Consider what this means. It means that

• our God is not a pale abstraction.
• Our God is not a remote being who sits enthroned on some ethereal height, absorbed in the contemplation of his own perfection, oblivious to this grubby realm in which we live.
• Our God is concerned with the tangible, with the mundane, with what goes on in the field, in the factory, in the courthouse, in the exchange.
• Our God is the maker of a material world — a world of eating and sleeping and working and begetting, a world he loved so much that he himself became flesh and blood for its salvation. In this sense, then,
• our God is eminently materialistic, and nowhere is this more clearly recognized than in the Bible, which, for that very reason, has always been a stumbling-block and an offense to those Gnostics, past and present, whose delicacy is embarrassed by the fact that they inhabit bodies, and for whom religion is essentially the effort to escape from or deny that fact.
• Our God is not a dainty aesthete who considers politics and economics subjects too crass or sordid for his notice.
• Neither is he a capricious tyrant who has enjoined an order of distribution that condemns retirees after a lifetime of toil to subsist on cat food while parasitic sybarites titillate palates jaded by the most refined achievements of the haute cuisine. It is men who have enjoined this order in denial of his sovereignty, in defiance of his righteous will.

The earth is the Lord's! To the biblical writers, this was no mere platitude. They spelled out what it meant in concrete terms. For them, it meant that the material universe which had been provided as a storehouse of natural opportunity for the children of men was not to be monopolized or despoiled or treated as speculative merchandise, but was rather to be used reverently, and conserved dutifully, and, above all, maintained as a source from which every man, by the application of his labor, might sustain himself in decent comfort. It was seen as an inalienable trust, which no individual or class could legitimately appropriate so as to exclude others, and which no generation could legitimately barter away.

The earth is the Lord's! With the recognition of this principle comes the recognition of the right of every man to the produce which the earth has yielded to his efforts. As the Apostle Paul says in his first letter to the Church at Corinth, if the ox has a right to a share in the grain which it treads out, surely a human being must have a right to the fruits of his labor. For the exercise of this right, he is, of course, accountable to God — but against the world, it holds.

To one who takes seriously, as I do, that insight about human nature which is expressed in the doctrine of original sin, there can be nothing self-evident about the rights of man. In the words of my friend, Edmund A. Opitz, "the idea of natural rights is not the kind of concept which has legs of its own to stand on; as a deduction from religious premises it makes sense, otherwise not." The French Revolution and its culmination in the Reign of Terror demonstrated that humanistic assumptions afford no secure foundation for the concept of human rights. That concept, for the believer, can be neither understood nor justified except in terms of what Lord Acton so eloquently speaks of as "the equal claim of every man to be unhindered in the fulfilment by man of duty to God."

This is what it comes down to: How can a person be "unhindered in the fulfilment of duty to God" if he be denied, on the one hand, fair access to nature, the raw material without which there can be no wealth; and on the other, the full and free ownership of his own labor and its earnings?

You who have studied the history of the Peasants' Revolt in sixteenth century Germany know that in calling for the abolition of serfdom and the restoration of the common lands, the peasants were simply voicing demands which were logically implied by Luther's doctrine of the priesthood of all believers — that the service of God to which all the faithful are elected requires, as I have said, access to the land and its resources, and the free disposal of one's person and of the guerdon [editor's note: reward] of one's toil. Despite the excesses that accompanied this uprising, Luther's part in the suppression of a movement which stemmed logically from his own teaching must always be a source of pain to those of us who revere him for his spiritual genius and integrity.

The earth is the Lord's! The same God who established the just authority of governments has also in his providence ordained for the major source of revenue. Allow me to quote from Henry George:

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, we may see a proof of the beneficence of the Creator . . . 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 men 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 the value attaching to land — the provided fund from which they can be supplied (George 1889).

On another occasion he wrote:

The tax on land values is the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses (George, P&P, 421).

And yet, my friends, in the topsy-turvy world in which we live, this provided fund goes mainly into the pockets of speculators and monopolists, while the body politic meets its needs by extorting from individual producers the fruits of honest toil. If ever there were any doubt about the perversity of human nature, our present system of taxation is the proof! Everywhere about us, we see the ironic spectacle of the community penalizing the individual for his industry and initiative, and taking away from him a share of that which he produces, yet at the same time lavishing upon the non-producer undeserved windfalls which it — the community — produces. And, as Winston Churchill put it, the unearned increment, the socially-produced value of the land, is reaped by the speculator in exact proportion, not to the service, but to the disservice, done. "The greater the injury to society, the greater the reward."

We hear constantly a vast clamor against the abuse of welfare. I do not for a moment condone such abuse. Yet I ask you, who is the biggest swiller at the public trough?

• Is it the sluggard who refuses to seek work when there is work available?
• Is it the slattern who generates offspring solely for the sake of the allotment they command?
• Or is it the man — perhaps a civic leader and a pillar of his church — who sits back, and, with perfect propriety and respectability, collects thousands and maybe even millions of dollars in unearned increments created by the public, as his reward for withholding land from those who wish to put it to productive use.

Talk about free enterprise! This isn't free enterprise; this is a free ride.

But if that same person were to improve his site — if he were to use it to beautify his neighborhood, or to provide goods for consumers and jobs for workers, or housing for his fellow townsmen — instead of being treated as the public benefactor he had become, he would be fined as if he were a criminal, in the form of heavier taxes. What kind of justice is this, I ask you? How does it comport with the Divine Plan, or with the notion of human rights?

Let me make this clear: Acquisitiveness, or the "profit motive," if you will, is a well-nigh universal fact of human nature, and I have no wish to suggest that the land monopolist or speculator has any corner on it. Even when I speak of him as a parasite, this is not to single him out for personal moral condemnation. He is not necessarily any more greedy than the average run of people. As my late friend, Sidney G. Evans, used to say: "if you have to live under a corrupt system, it's better to be a beneficiary than a victim of it." But the profit motive can be channeled in ways which are socially desirable as well as in ways which are socially destructive. Is it not our duty to do everything we can to build an order without victims one in which the profit motive is put to use in such a way that everybody benefits?

I do not harbor the illusion that the millennium is going to be ushered in by any program of social betterment. My theological orientation does not happen to be one which minimizes the stubbornness of man's depravity. Yet to make the depth of human wickedness an alibi for indifference to the demands of social justice is to ignore the will of him who said:

Take away from me the noise of your songs;
to the melody of your harps I will not listen.
But let justice roll down like waters,
And righteousness like an ever-flowing stream.
(Amos 5:23-24)

To some of you, the promotion of specific programs for social justice is seen as part of the responsibility of the institutional church; to others it is not. But all of us, I am sure, can agree that the individual Christian (or Jew or Moslem, Hindu or Buddhist, as the case may be) has a solemn moral obligation to study the issues carefully, and then involve himself strenuously in whatever social and political efforts his informed conscience tells him best advance the cause of right.

O shame to us who rest content
While lust and greed for gain
In street and shop and tenement
Wring gold from human pain,
And bitter lips in blind despair
Cry, "Christ hath died in vain!"
Give us, O God, the strength to build
The city that hath stood
Too long a dream, whose laws are love,
Whose ways are brotherhood,
And where the sun that shineth is
God's grace for human good.*

The earth is the Lord's!

* From "O Holy City, Seen of John" by Walter Russell Bowie. Copyright, 1910, by A. S. Barnes and Company. Quoted by permission.

Free Trade, Free Land and Free Men (1888 Brooklyn Eagle Article)

The Brooklyn Eagle, October 24, 1888, page 1

FOR SINGLE TAX
Henry George Men Hold a Mass Meeting at the Rink.
Cleveland's Name Enthusiastically Cheered.
Addresses by the Author of "Progress and Poverty," by Hon. Thomas G. Shearman, Rev. Hugh O. Pentecost, Louis F. Post and Others.

Another great audience gathered at the Clermont Avenue Rink last night to hear the discussion of political issues. It filled every seat in the big hall, crowded the platform and the galleries, choked the entrances and formed a dark dado around the sides of the room wherever standing place was available. It was the single tax men's night to own the speakers' platform, and the key to all that was said was conveyed in plain words above the speakers' desk: "Free Trade, Free Land, Free Men." The audience was not only large, but it was wide awake. It enjoyed the brass band and it listened attentively to every word of the single tax orators and cheered vociferously in the right places to show that a large proportion of the crowd was in sympathy with the sentiment expressed above the speaker's head.  It had a habit of hissing, too, and whenever Mr. Blame, Mr. Andrew Carnegie or the Tory Government of England was mentioned it practiced this habit. The meeting was of citizens who favor the election of Cleveland and Thurman, and though less was said on this subject than on "Free Trade, Free Land and Free Men," the occasional mention of Mr. Cleveland's name left no doubt as to the sentiment of the vast assemblage regarding his candidacy. They cheered for him uproariously, spontaneously and untiringly. The slightest allusion to him called forth a, wild outbreak.

C. T. Christensen had agreed to preside at the meeting, but was called out of town at the last moment, and Thomas G. Shearman, who was booked as one of the speakers of the evening, acted as chairman. Beside him on the platform sat Henry George, the Rev. Hugh O. Pentecost, Louis F. Post, James Hickling and others of the shining lights of the Single Tax legions. Mr. Shearman called the meeting to order and said:

While we hope and trust that in this audience there are many Protectionists, that both sides of this great question are represented here, we wish it understood that on this platform we stand for no half way politics, no semi Protection, no false pretenses, no evasions. We are absolutely for Free Trade [applause] as we are for free land and for free men. In the old time of slavery the master would give everything to his slave rather than Free Trade. He would give him free whisky as the Republicans would give tree whisky to the white slaves of today. Slavery was a system of "Protection" to the inferior workman. The slave was protected in the liberty to work for his employer. The Irish people have had Protection. Within the last hundred years 80 statutes have been passed by a British Tory Parliament, composed mostly of Protectionists, furnishing "Protection" to Ireland, the very statute under which Dill on was imprisoned in an Irish jail without the privilege of a trial by jury or by any decent Judge was a "Protection" law.  The Tory Parliament gave it the name Protection.  But Irishmen called it Coercion. Mezeroffs paper, that preaches the assassination of innocent women and children, is being circulated by the First Ward Republicans, because of its advocacy of Protection. He should advocate this American system of Tariff, for it is simply coercion. Protection coerces the American workingman into assisting the development of monopolists and Trusts. It puts coercion upon him and upon American industry. It fosters no industry. It murders industry. What does a Tariff do? Can any one look me in the face and say it assures him better pay for his toil? It is simply coercion to prohibit you from carrying on an industry that brings you into relations with other nations. What does the Government do when it puts a "Protective" Tariff on coal?  It says, You shall get no more coal for your labor than Mr. Elkins, Mr. Maine and the other coal monopolists shall allow you to have. The land owners of this country, those who have been sharp enough to get possession of the richly productive mining tracts, grind the manufacturers that grind you. You must first get $100,000 to put into a mine or manufactory to be protected under this American system. We are for Free Trade because it means the highest wages: because the history of this country shows that with every advance of the Tariff there has been a depression of wages. What stuff is talked to you about the importation of foreign goods throwing out of employment American workmen. The Protectionists shout that increased importations will drive out the gold of the country. There never was enough gold in this country to pay for a single year's importations. All the gold in the world would not buy the goods that have come across the ocean to this country in the last ten years. So what can't be done, in spite of the tearful arguments of Protectionists, won 't be done. In the last 27 years, since our Protective Tariff began, more gold has gone out of this country than during the years of '46 and '47, when we had Free Trade. When the Tariff reached its highest point the greatest amount of gold went out. The export of gold is merely a mercantile transaction. The other charge is that Free Trade will throw the American workman out of employment. If you could import $7,000,000,000 instead of $700,000,000 worth of goods the call for American labor would advance ten times what it is now. Why are Brooklyn and New York great manufacturing cities? Why are we more successful than Chicago or St. Louis? They have markets on both sides of the ocean, while by our system of Protection we are cut off from one side, it is because we, from our location, can get more readily material from across the ocean. If the mad scheme of the Protectionists could be carried out to shut out entirely this foreign material, and compel us to rely on our home production, what a blight would fall upon this city. Sweep away this Protection system and we would have all this foreign material brought in to work up, and would have two markets instead of one. Yet you will go on in one way or another "protecting." You might have liberty, freedom of trade and of commerce, and double the manufacturing business of those cities. You hear of the revenue reformer being converted into a Free Trader; of the moderate Protectionist into a revenue reformer, but in this campaign you read of no Free Trader being converted to Protection. Every gain the Republican party has made from the Democratic ranks has been of those men who opposed the freeing of the slave.

After the cheering had died away Mr. Post stepped forward upon the platform and amid renewed applause walked back and forth triumphantly. "Last night," he said , "Mr. McKinley stood upon this platform." [Laughter, applause and hisses.] Then an enthusiastic Republican got up and shouted "Three cheers for McKinley." In the confusion the crowd thought that he was yelling for Post and followed his lead with a will.  Mr. Post continued:

I am glad to hear that demonstration for, in the first place, it shows that we have people here to convert, and in the second, because it is due him from Protectionists as the best representative of Chinese polities in the country. [Long continued cheers.] He says that the Tariff is not a tax, that it is paid by the man who sends his goods to this country to sell. The Tariff on firecrackers is 100%. I want Mr. McKinley to explain how much the Chinaman makes on his fireworks after he has paid that tax. Our Chinaman says we are absolute Free Traders. It is true there is no 7% about us. We are with the Democratic party because we get that little reduction from them, which is better than nothing and a step in the right direction. If we are to have trade, why should we not have it free. We have Free Trade all over the United States. In fact, here is the only example of absolute Free Trade in the whole world. I have a horse that I want to exchange for two mules. I can take him to New York, to Pennsylvania or New Jersey and make whatever terms I am able. It is only when a policeman comes alone and says I can't trade that I get Protection. If I desire to trade with a Canadian not only must I give him one horse for his mules, but I must give the Government another. What do they want of that other horse? They want to put him in the Treasury vaults or else compel me to go over into Pennsylvania and sell to someone, Carnegie for instance, who demands a horse and three-quarters for a couple of mules. [Laughter and applause.] But this man doesn't want the extra three-quarters to divide among his men who raise mules, unless they are organized and strong enough to make him. The employer always gets the bonus, and divides with his employes — when he thinks best. Workingmen are getting sick of being fooled about this notion that the Tariff gives them higher wages. Some, however, are afraid that shops will be closed and that foreign goods will run us out of the market. How can we buy foreign goods unless we have our own goods to exchange for them. This shop closing story is another great fraud. The truth is the monopolists have a soft thing, and they are going to hold on to it. That is what makes me think of a story. A darky was working at $5 a week for a Protectionist boss. One day he was in great trouble, for he had a dream. He told his employer, that he was dead and had gone to hell. "Well, that's a bad place," was the answer. "Did you see anyone there you knew?'' "Oh yes, lots of them." "Did you see any Protectionists?" "Yes, I did, and every one held a $5 darky between himself and the fire to keep off the heat." Nor do Protectionists like to let go their victims in this world. Every day we buy the necessities of life from whomsoever we please. We give for them the product of our labor, or its equivalent. We don 't want Protection in this trade. We had absolute Protection from outsiders when the Republican blizzard of last March came along and I for one didn't like it. About 3000 years ago the children of Israel were going through the wilderness. God sent quails to them from Heaven. It was all import and no export and almost everybody liked it. Finally Aaron went to Moses and said: "This invasion of quails ought to be stopped. I have an infant industry that must be protected. In short, I have started a little poultry yard." It was no use to put on an ad valorem duty of 100%, as suggested, because the quails had no money value, so it was determined to put on a specific duty of $5 a dozen. I don't wonder that you doubt this story and believe the incidents never happened. Well, the story is not true. Do you know why? Because Moses and Aaron led "the children of Israel through the wilderness, and not Blaine, Harrison or Carnegie. Whenever you tax a product of labor you make that commodity harder to get, but the more you tax land the cheaper it becomes. It is only by abolishing the tax on labor and coming down to a single land tax basis that we accomplish our great purpose. We shall then have cheap goods, cheap land, high wages and free men, for they all go together.

When Henry George rose to speak he was greeted with a thunder roll of applause. When it stopped for want of breath someone who had saved his lungs shouted lustily, "Three cheers for Henry George." They were given. "Three cheers for the 68,000" were called for, but failed, because the great single tax advocate had begun to speak. Mr. George said:

The gentleman says "Three cheers for the 68,000." He means the men who voted for me two years ago when I ran for Mayor of New York City.  I ran as a candidate then for the purpose of introducing into our politics a principle. I ran because I believe it is only by political action and through political action that the emancipation of labor can be secured. For the very same reason that I was a candidate two years ago, from my belief in and my love for these same principles, I stand here to advocate the election of Grover Cleveland.

At the mention of the President's name there was a great roar of applause, beginning not gradually, but at its full volume, the instant the speaker had spoken the name. The cheering continued for more than a minute. Mr. George then continued:

I told you then that we needed the formation of no new party, but the revival of that party of the people which Thomas Jefferson called Republican and Andrew Jackson called Democrat, that party of equal rights that represents the true idea of a government for the people by the people. I never dreamed two years ago that I would now be standing here advocating the election of a Democratic candidate. I had not the confidence in the party that would allow me to believe that they could have given me the opportunity I now possess. Thanks to Grover Cleveland the Democratic party in this national contest again has raised the standard of Jeffersonian Democracy, timidly, it is true, falteringly. Only a 7% move. But we hail it as a beginning. We are for that 7%. Not for that alone, but because we know this movement, once started, can never be stopped. I trust my friend, the previous speaker, will live long enough to see the full consummation of his wishes. If he lives to three score years and ten I have faith by that time we will have swept all Tariff away. I have faith in that because I have faith in the American people. A fair discussion will bring death to Protection. The American people are nobody's fool. Protection is repugnant to the genius of American institutions. It existed in Europe before it was borrowed by us. It is an old scheme of monarchy and aristocracy. Free Trade is as much a right of the people as free speech. Protection should indeed be called coercion. We don't want Protection. The American idea is that each should support the church that pleases him best. No state church. Apply this to trade. Why should not those who believe in Protection take up a voluntary subscription for the infant industries? That would leave us all free men. Mr. McKinley said in this hall, so I am told, that Protection does not raise prices. If that is true, what does anyone want Protection for? The whole end and aim of Protection is to raise prices. When. I was a boy it was, indeed, Protection to infant industries.  They ceased to talk about that later on. It used to be, a good while ago, Protection to American capitalists. But that, also, is of the past. Now it is Protection to labor. How they do love the laborer, these good monopolists, such as Andrew Carnegie! How does labor get this vaunted Protection? It doesn't get it. It goes to the employing producer. It is only when by some combination, trust or monopoly by which domestic as well as foreign competition is choked off that Protection yields its full value of protection — to the monopolist. It is not the profit his employer is making that fixes a man's wages. Not at all. It is the price at which the employer can get a man to take the workman's place. It is in the protected industries of our country that laborers have had to fight most and make the greatest efforts to escape being crushed to the wall. But I believe that now a spirit of self respect is awakened among American workingmen. Think of it. Is labor such a poor, helpless thing that it must have protection? Are the American people so inferior to the rest of the world that the industry of 60,000,000 people is to be jeopardized by the law of the British lion unless he is kept at bay by men in buttons? Trusts need protection but labor can protect itself if you only sweep away restrictions and give it a chance. This campaign is the opening of a discussion of all economic questions. The appeal of intelligence will not stop here. We have started on the road to freedom and I have sufficient faith in my countrymen to think that we will not stop till we reach the goal: till we have swept away every tax that deprives the worker of the fair result ot his work. We will make our one direct tax the means of breaking down monopoly. Every tax on the products of labor diminishes their amount. It is the same way with a tax on imports, which tends to lessen the aggregate amount of wealth there is for all and brings to some too much and to others too little. A tax on products requires more capital for carrying on the business. Indirect taxes were never objected to by the first person who paid them. Why were match manufacturers anxious to have the tax kept on? Because as in every other case the price was increased and the man with large capital had an advantage over the man with small. Under that scheme the man who begins as a laborer shall remain one. But there is a tax that takes from no one anything that is due him from his industry — that is the tax on land values. [Long continued applause.] The value of land differs essentially from that of anything produced by labor. This house has a value representing the labor required to put it up and the materials used. With the land on which the house stands the case is very different. That was not produced by labor. Yet the value of the land is ever increasing and that of the building decreasing. The increased value of the land has been produced not by industry, but by the number of people around here. It has been produced by the whole community, belongs to the whole community, and is therefore the proper basis for tax. Instead of promoting monopoly by our plan we are diminishing and destroying it, and we are making it harder for dogs in the manger to hold land that they cannot use. This is the absolute Free Trade at which we single tax men aim. We do not support Grover Cleveland because we imagine that he aims at any kind of Free Trade, nor because we imagine that the Democratic party favors it. But we support Grover Cleveland [cheers and applause] because this is the direction in which he is leading. We stand with the Democratic party because at last its face is turned in the right road, and it has only to keep on to become as Democratic as Thomas Jefferson himself. A gentleman said to me tonight as I came into this hall, "There are people in Brooklyn so stupid as to think the Cobden Club is running this campaign. "I am a member of the Cobden Club [great applause] and if they have any money they might send me a little. I am very willing to take it and use it. The only complaint I have is that the Cobden Club doesn't believe in Free Trade. They see what American Free Trade would do to them. In regard to this question I once said to an Englishman: Once our people are started they will never stop as in England. They will go on till Free Trade ultimates in free land and free men. When I was elected an honorary member of the Cobden Club I was very glad to accept as a mark of respect to Richard Cobden [applause], a man who sought to get justice for Ireland, a man who, when aristocratic England was on the side of the States that would break up the Union, saw in our side this light for freedon; the man that wanted to break down barriers that divide nations, to disband armies and unite the world by a fraternal bond of peace. When Gladstone is restored to power and Ireland has the restoration of home rule the movement for the natural and equal rights in land will spring up with power to grow. And this little movement here beginning with a 7% reduction will go on and on. I am proud to have lived to see this time. This is not a struggle for the protection of labor, but for the emancipation of labor; not to give a few monopolists a few more percent profit at the expense or their fellow citizens, but to give to all their full and equal rights of making this a republic worthy of a name, in which there shall be no master and no tramps, no monstrous fortunes or monstrous poverty, a republic in which there shall be room for all and abundance for all.

The Rev. Hugh O. Pentecost was introduced eulogistically by Mr. Shearman. Among other things Mr. Pentecost said:

Your chairman has told you a truth. I do not believe in all the doctrines of Christianity, as perhaps you do not, but I have a perfect belief in the Founder of Christianity. If Jesus of Nazareth were on earth today He would be engaged in this work. This meeting was called under tho auspices of a single text — Cleveland and Thurman Campaign Committee. That is a combination that some in this audience may not understand. If the men who are thus ignorant have recovered from the shock of the recent remarks about Mr. Cobden they can be enlightened by my explanation. What do the single tax men desire? First, the abolition of every form of indirect taxation — the Tariff tax and the Internal Revenue tax. Indirect taxation is sneaking taxation. It sneaks into your house and taxes everything you use without your knowing you are being taxed. It is peculiarly in favor with despots. When a monarch wishes to raise money without disturbance he uses indirect taxation. It is cowardly. A man goes into a store and buys a suit ot clothes. Nothing is said about the tax on them as it is included in their price. Should a "man in buttons" meet you at the door of the clothing store and demand $10 tax of you for the clothes you had bought your indignation would know no bounds. It is easy to overtax the people by indirect taxation. The single tax men are opposed to the tax on products of labor. What we want is not less wealth, but more wealth. Our system keeps men from producing the very thing we stand in need of. It is idiotic. It punishes a man that does just the thing we want him to. Is he going to do the monstrous thing of building a house? We tax every step he takes, every nail and stick he buys. I know a man who wants to build a back kitchen on his house, but daren't do it for fear of the increased assessment. There is probably not a man in this house who is not at least once a year regularly a liar. Men who in church or family are too honorable, to stain their lips with a lie, yet swear to the tax assessor that they do not own certain property which they know they do. Even ministers who go to Europe and make many purchases there sometimes deceive the customs officers. But it is not his fault. A man goes to Europe and buys certain articles, then if he doesn't pay a fine to the Government they are taken away from him. This is on a par with the policy which taxes the most industrious of our people and makes the burden upon the owners of lots, vacant and rapidly rising in price, as light as possible. Any man who cannot see the absurdity of this policy is as blind as a bat. When Grover Cleveland said that "unnecessary taxation is unjust taxation," he told the truth. [Cheers and long continued applause.] We can prove from facts that it is unnecessary to tax the products of labor. We propose to put a tax upon the value or land. We believe in that single tax because it is right, and we never saw any one who could demonstrate that it wasn't right. A man produced this house, therefore it belongs to him. God produced the land; whom, then, does it belong to? [A voice: "God."] You are right: He has never given it away; He has never sold or willed it away. If the transfers cannot be shown we shall hold that it belongs to God. Between the land and the house is the value of land. Did God produce that? No, but the people did, and why does not the land belong to them? The house belongs to the man because he produced it. God produced the land and it belongs to all His children. What we want is for the people to stop the stealing from the man who owns the house and take what belongs to them. When the New York Sun in its wonderful wisdom says [hisses] that all the wealth of the country if divided equally would give but $800 to each inhabitant, don't you see that we want to produce wealth so that it will go around. The only way we can do that is by lessening not increasing the cost of Protection. You may shout again now if you choose for I am going to mention McKinley's name. [Hisses.] He tried to tell an audience in this hall last night that articles were made cheaper by laying on a tax. That is not so, as any one can see, but this is a fact. The more we tax land the cheaper it gets. We want to have land so cheap that when a workingman wants to build a house he will not have to spend his life in saving money to buy the lot. We want also to make it impossible for men to keep land vacant, to let it lie idle doing no one any good and increasing in price simply because more people are living near it each day. This is an increase in value to which no man has exclusive right. After we have got this reform established other reforms will come much easier. It has often been asked how it happens that we work with the Democratic party. I will tell you. Because we want all taxes removed. We want to get rid of the Protective Tariff first, then the revenue tax, till we get down to our single tax. The Democratic party has made a beginning, and that is a great thing to do after all the years of high Protective Tariff talk that has been poured into the ears of the workingmen. They have heard the Protection side of the story till they have begun to think that it must be true. Perhaps the truth has been impressed upon them more forcibly and terribly. A story is told of an Englishman who had been stopping at a hotel in the far West, and who finally asked for his bill. "Three dollars without potatoes, $4 with," was the reply. The Englishman said he thought the charges were exorbitant and growled considerably. Pulling a big pistol from his pocket the landlord told his guest to look out of the window. "Do you see that graveyard?" he inquired. Well, that place is filled with men who thought my charges were too high. What do you think now?" The Englishman expressed himself as very satisfied. So the American workingman is "satisfied" with the High Tariff robbery of the manufacturers, only, in this latter case the pistol is starvation which affects not himself alone, but wife and little ones. No wonder that under such circumstances the bosses' view has been the laborer's. You know what a fetish is? A savage worships in his cave. Every time he comes back from a hunt, fish, or fight  successful he gives that miserable fetish all the credit. All his bad luck he attributes to other causes. As the savage grows more intelligent he drops his fetish. The Tariff is the fetish of the Protectionist. Just at this time Mr. Blaine is its great high priest and Benjamin and Levi are altar boys. All our fine weather, plentiful crops and beautiful women are due to the Tariff. I sometimes think that the old hymn should read as follows:

"Tis Protection that can give

Sweetest pleasures while we live;
Tis Protection that can give
Solid comfort when we die.

The rhyme is not just right, but I think you see the meaning. Like the Indian, the Protectionist doest not blame his fetish for the growling growing discontent in the ranks of labor, this dark shadow on the land. There are people who believe every good comes from Protection and every bad from some other causes. Just when this superstition was at its height Grover Cleveland walked into the temple. He did not quite dare to strike down the miserable fetish, but he slapped its face and said to the congregation; This thing you worship is a humbug." We honor him because of this, and because he brought on this great discussion that will not end until we have Free Trade in goods, free travel for men and free land for labor.

After Mr. Pentecost's speech half of the audience remained to hear Mr. George and the other speakers answer questions.

A 1938 NYT Letter to the Editor: Collecting Ground Rent

I came across this rather good letter to the editor, from 1938.  (Trinity Church Corporation, a major landlord in downtown Manhattan, was the subject of a NYT article this past week, as well as the subject of a major series in the NYT in December, 1894):

1938-09-03 Letters to The Times

Collecting Ground Rent
Single-Tax System Regarded as No Detriment to Building

TO THE EDITOR OF THE NEW YORK TIMES:

Fabian Franklin, in his letter to THE TIMES discussing the demolition of John D. Rockefeller's Harlem tenements in order to save taxes, writes:

"That objection is simply that virtual abolition of land ownership, which the single-tax plan is designed to effect, would make the building of houses in a city an extra-hazardous business, because, under the single-tax regime, in the great majority of cases the investment would result in a disastrous loss to the owner of the building.  I was neither blaming nor praising Mr. Rockefeller for the demolition of Harlem tenements."

What is the so-called single-tax system?  It is the collection by the government, through the taxing officials, of the entire economic or ground rent of land and the repeal of all taxes on buildings and other products of labor and capital.  That ground rent is estimated to be 9% of the capital value of the land.  New York City is now collecting one-third of this ground rent.  The market value of the lots is the remaining two-thirds, capitalized.  Dr. Franklin's thesis is that if the entire ground rent is collected no one would erect buildings, because "in the great majority of cases the investment would result in a disastrous loss to the owner of the building."

Some of the finest buildings in New York City are erected on leased land and the lessee pays the ground rent 100% besides a tax on the building.  There are hundreds of buildings erected by lessees of lots owned by Trinity Church, Astor estate, Rhinelander estate, Sailors Snug Harbor and others.  The lessees must pay all the taxes, both on land and building, amounting to 3% of the assessed value of both, and to the landlord 6% of the market value of the land.

Thus the entire ground rent is paid by the lessee, but only one-third to the government representing the people who made that value by their presence and activities, the remaining two-thirds to the landlord.  Notwithstanding that they are thus obliged to pay 100% of the economic rent, bankers and business men erect buildings costing millions.  Under the Henry George plan they would have to pay less, for the taxes on these costly structures will have been repealed.

Perhaps if Mr. Rockefeller had not been obliged to pay taxes on the buildings he might not have pulled them down; or, if he had, would have erected better buildings in their place in order to get a return on his investment in buildings.  The ones who will benefit most from the adoption of the Georgian philosophy are the owners of humble homes.  The average small homeowner's house is assessed for at least twice the assessed value of the lot.  If the house is relieved from taxation and the lot taxed the entire ground rent, his tax will be less than it is now.  The difference will be made up from vacant lots and lots that are worth more than the improvements.

After all, the building of houses is like any other business.  The builder takes the risk of lessened demand because of changes in fashion, obsolescence, competition.  It is estimated that 95% of new businesses ultimately fail. With the adoption, however, of the philosophy of Henry George, commonly called the single tax, failures in the housing and other businesses will be much fewer.  This is because neither houses nor goods nor anything else will be taxed.  The collection of the entire ground rent will not lessen the area of the surface of the earth one inch.  On the contrary, it will open to occupation and use land that is now held for speculation purposes. 

The taxation of any product of labor and capital will add the amount of the tax to the price, lessen demand and thus curtail production.  The result is unemployment and misery.

Frederic Cyrus Leubuscher
Essex Fells, N. J., Aug. 31, 1938

The Family Tree of Economics, and its Missing Limb

Check out this link, and run your mouse over the graphic to see the missing connection.  I commend the entire page to your attention.

Understanding Economics: Context of This Course.

Inside the back cover of the 17th edition of Economics by Samuelson & Nordhaus there is a "Family Tree of Economics" that graphically summarizes the major trends in the discipline's modern history. It presents the most famous exponents of the main schools of economic thought: Mercantilism, the Physiocrats, the Classical School and Neoclassical Economics -- leading to the two modern "endpoints" of Modern Mainstream Economics and Socialism. The book's chart depicts the "value-free" science of economics in a rather partisan way: it places Modern Mainstream Economics center stage as the fulfillment of its precursors -- and leaves Socialism on the far left, trailing off into irrelevance.

Shalom and Taxation

This quote came across my inbox today, and I thought it worth sharing:

“We operate from the concept of ‘shalom,’” Forrister said when he reported on that meeting to The Huntsville Times. “’Shalom’ means more than the absence of war, it means the well-being of all. Ezekiel said to seek the ‘shalom’ of the city you’re in – and he was writing to people in exile in Babylon. We’re to seek the good of the whole community, of all of society.”

I came very slowly to the point of view that the nature of the ways we fund our common spending is at least as important as the spending side of the budget.  That taxation can be destructive or constructive.  That it can be used to create vital healthy communities or ones in which wealth and power concentrate into a few hands.

I grew up with the benefit of grandparents who understood this, and I still didn't "get it" until well after they were gone.  Certainly my college education didn't provide me any glimpses of it, despite being concentrated in fields in and around it.  I hope that others who are seekers after peace -- after Shalom -- will investigate what Henry George's "Remedy" -- land value taxation -- has to offer for their community and their country.

And here's the final paragraph from the email that the first quote came from:

Taking care of each other is simple kindness, not something sinister, said Forrister, who was trained as a Church of Christ minister.

“Thinking about looking out for the common good is not socialism,” Forrister said. “Capitalism has to be tempered by social policy that responds to human needs that capitalism won’t respond to.”

Our current form of capitalism is, among other things, land monopoly capitalism.  Were we to remove the land monopoly aspect, through land value taxation, we would have a purer capitalism, one which I think would better serve the ideals we claim to hold dear.

Wasserman: The Ethics of Land-Value Taxation

Two great quotes:

The historical fact that land values have been privately appropriated and that this practice has been sanctioned for many generations does not alter its inherent inequity: an ethical wrong is not converted into a right by the benediction of time or of social sufferance.

and

If the present generation becomes conscious of an old injustice, is it powerless to seek redress?  "New time" it has been said, "oft makes ancient good uncouth."

This was in a booklet published in the early 1960s.

 

The Ethics of Land-Value Taxation

Louis Wasserman, Ph. D.,
Professor of Philosophy and Government,
San Francisco State College

The question, briefly stated, is this: Should the owners of land whose rent and increments would be partially or wholly confiscated by a program of land-value taxation be compensated for their losses?

We are not bound here by what Henry George thought about the matter; nevertheless, there is probably no better position from which to launch our consideration.  The answer given by the father of the Single Tax was clear and explicit: No, the landowners should not receive compensation.

Why not?  Since George made so much of social justice -- asserting it as the basis of his whole scheme -- upon what grounds could he justify the confiscation of landed wealth?  The answer is implicit in the very essence of his social analysis.  Let us turn to his argument.

What, George asks, is the moral basis of property -- any kind of property?  And he replies that this basis is to be found in the use of a man's powers to produce something of value; once he has done so, the product is henceforth his to use, to dispose of, to exchange into any tangible or intangible form.  The right to property, then, is the right to the fruit of one's labor.

But this, he continues, is precisely not the situation with regard to landed property.  The raw land is not produced by any man's labor: it was there before the advent of man, it is the bounty of nature to all men in common, and it is literally the foundation upon which they exert their labors.  And just as the raw land is created by nature, so the value it acquires as real property is due to society as a whole -- to the growth of the community with its services, its needs, and its uses.  As community-created value, then, the rental and increment derived from the natural land ought to be appropriated by the community at large and used for public purposes.

Just as a man, then, has the full right to the products of his own labor -- say a house he has built or has purchased with his earnings -- so no individual has the right to the land itself, which he has had no hand in creating and whose value is due to the aggregate of community efforts rather than to that of any single person within it.  The historical fact that land values have been privately appropriated and that this practice has been sanctioned for many generations does not alter its inherent inequity: an ethical wrong is not converted into a right by the benediction of time or of social sufferance.

This, in brief, is the rationale of Henry George's appeal for the socialization of land values.  It is couched in terms of natural rights, and its fundamental premise is the labor theory of property, viz., that the only true source of private property, its ethical justification, rests in the labor by which it was produced, whatever direct or indirect form it takes.

That there are practical weaknesses in this view is, of course, apparent.  The labor theory of property has been shelved, since the nineteenth century, in favor of more complex and sophisticated analyses of wealth production, and it can no longer be accepted as a self-evident proposition.  Moreover, the theory of natural rights upon which it rests -- although stubbornly recurrent in Western thought -- enjoys at present only a limited vogue among moderns; there is too much disagreement on specifics and, no matter what its form, such a concept is regarded as too rigid for social purposes.

Nevertheless, if we are to seek for an ethical justification for private property it is unlikely that we can find anything better than the labor theory.  It is no argument against the ethical rightness of that theory that it has been historically superseded by another, or that it is insufficient to account for the complexity of the productive process, or that the division of labor has made unintelligible the product of any individual worker.  No matter how greatly production has become socialized or in what manner its rewards have come to be partitioned, the irreducible element remains that of individual labor, the contribution of the hand or brain of each producer to the material and equipment at hand.  It is not enough for a theory of property simply to describe its character and distribution; there must be an explanation to account for the phenomenon and some social ethical criterion to justify it.  I am aware of no ethical theory, ancient or modern, religious or secular, which would deny explicit or implicit approval to the labor theory of property.

But perhaps it will be argued against any such ethical contention that private property is simply what a society has caused it to be, and that since a society is the sole source of its own ethics, the matter ends there.  What then, it may be asked, is used to justify the institution: force, fraud, custom, tradition?  Each of these may have its weighty explanation, but what can be said of its ethical sanction?  At worst, that it has been imposed, willy-nilly; and, at best, that it represents a social arrangement sanctified by age, legality, and expectation.  But the history of property, as idea, usage, and institution, is so heterogeneous among so many cultures of the past and present that the term itself can be taken to mean only that which current convention decrees it to mean.  Perhaps, then, property may be best conceived, to use the phrase of Walton Hamilton, as "a conditional equity in the valuables of the community."

If -- setting aside the natural rights theory -- the ethical test of land-ownership and increment is taken to be a matter of social convention or utility, the whole issue is, of course, thrown open for social evaluation by each generation.

The present condition is that most of the usable raw land in the United States is held privately; it has been obtained by purchase, gift, or inheritance; it enriches its owners by way of direct use, rental income, or profitable sale; the community siphons off part of this income in the form of an annual property tax or, when the land is sold at a profit, by a capital gains tax.

Now, the most extreme land-value tax proposal provides that this levy upon the rental value of the raw land be increased gradually until it approximates the full rental income; at the same time, tax levies on personal property, improvements, and as many other taxes as possible would be abolished.

What ethical considerations are involved in this proposal?  If we are to reject any "higher law" criteria, such as that of Henry George, we must revert to the test of "social utility" or some restatement thereof.  How are the ethics of social utility to be tested in our society?  The answer is quite simple: Social approval of any established practice is expressed by sheer inertia or by the rejection of proposed change; the reform of any established practice is engineered by the majority through democratic procedures.  To put it starkly, the ethical judgment with respect to any social change is transformed into a political decision.

We are all, of course, familiar with the democratic political process, but it is worth recapitulation to see how a social consensus may be reached on such an issue as land-value taxation.  We start with the theoretical foundations of popular sovereignty and government by consent of the governed.  The working machinery includes representative bodies, public-interest groups, freedom of expression, and the media of communication employed to shape public opinion.  Since every tax proposal is a matter of public policy, it must necessarily be discussed and legislated by the appropriate public body -- i.e., the state legislature, county board of supervisors, city council, or the like.  Sober attention must be paid in all such cases to the variety of interests, needs, motives, preferences, and other relevant factors in the affected community in order to shape a policy which attains its purpose and yet does not alienate too seriously any important segment of the population.  The final result, as registered in the legislative chamber or at the polls, is what we come to accept as public policy.

It would be too harsh a judgment to infer from the foregoing description of the democratic process that the sheer weight of numbers over-rides all consideration of private preferences.  What happens instead is that personal convictions, individual ethics, and material interests are mingled and measured and tested against each other in the give-and-take of public controversy; the result is a kind of rough-hewn, but acceptable, consensus which alone can make a community viable.  It is this broad consensus -- the specified or implicit assumption that the policy to be enacted is a contribution to the common welfare -- which defines the realm of social ethics in public policy making.

Nor is this political approach to be regarded cynically or derided as unworthy of decent folk.  The social ethic of American society is tightly bound to the prescriptions of our prevailing Judeo-Christian and democratic-humanistic traditions, and we may draw from that source as much in the form of ideal moral principles as we are humanly able to practice.  If we cannot agree upon common aims, we are at least the inheritors of a tradition of fair play as to means; and if the nature of justice is a matter of great dispute among us, we are still guided by what Edmond Cahn describes as the "sense of injustice" -- that is, a consciousness of wrongdoing and the commitment to abstain therefrom.

The social ethic of a democratic society is continually being created and revised through public dialogue, political action, and law.  It is necessary only to mention such illustrations as our attitudes regarding crime and punishment, treatment of our Negro population, the status of labor unions, sex information and birth control, the training of children, the prerogatives of women, and indeed the ameliorative role of taxation, to have us realize its progressively changing character.  Through the use of the democratic process the social ethic emerges as a sort of mean between the extremes of private ideals and private irresponsibility.  And it is worthy of mention that not infrequently the law itself nudges us into forms of behavior more ethical than we would exercise if left to our own dispositions.

Now, taxation policy inherently affects the general welfare of a community; and the social ethics of our society have for a long time recognized a distinction (despite certain weaknesses in definition) between earned and unearned incomes.  Taxing policies in the form of differential rates and other incentives have been used here and in many other countries deliberately to foster, or to discourage, certain social-economic developments.  A strong case can be made, in general, for taxation as a social instrument.

There was a time when the income tax did not exist at all in this country; then it was voted in, first as law, later as a constitutional amendment.  At its present steeply progressive rates, the income tax may "confiscate" up to 91 percent of excessively high earnings.  But, whatever the rate applicable, it is levied predominantly upon wages, salaries, and other forms of productive enterprise.  Would an increased tax upon the socially created value of the natural land be less equitable or less lacking in ethical propriety?

I am, accordingly, unable to find any ethical barrier -- either of higher law principles or of social utility -- raised against the proposal to recapture more fully the rental income and increased increment of the land.  There is, indeed, a strong rationale in its favor, especially since it would lead to the reduction of more burdensome taxes.  The problem is one of social engineering; it is a decision to be reached solely upon its merits in the political realm.

That there is now, and will be, strenuous opposition to such a program is of course only too clearly evident.  Without assuming the mantle of righteousness in prejudging the conduct of others, I would nevertheless venture to say that the main difficulties in enacting land-value taxation will stem principally from the following groups.  First, and most importantly, opposition will come from those who derive their incomes wholly or primarily from landholdings and from speculative profits thereon.  No argument concerning indirect, long-range benefits to them and others would suffice to soften their antagonism unless they stood to gain equally from a lightening of other taxes.  Then there is the large group whose simple inertia would inhibit any such contentious reform in taxation policy.  It is difficult to enlighten and energize this inert portion of any community unless the immediate benefits are made clearly, directly, and concretely self-evident to them.  For this group there is no sharp sensitivity to the ethics of land-value taxation, pro or con.  Finally, there are those in every community who have no vested interest in the change one way or the other but whose notions of propriety, of ethics, of the right to profit-making, or of general antipathy to government and reform would lead them to reject such a proposal on what are essentially ideological grounds.

If the result at the ballot box is to approve a measure to increase the tax rate on land values, it could not be denied that the social ethics had thus been expressed in a democratic manner.  Similarly, if the tax increase is defeated (as has been true most often in the past), it would properly imply that the social ethics of the community did not then sanction such a proposal.

But we have so far left untouched the critical issue with which we began this discussion: that is, whether compensation should be paid to landowners whose rental incomes or increments are seriously impaired or expropriated as a consequence of the increased tax.  Even if it be granted that land values ought, ab initio, to have been recaptured in full by the community for public revenue, the fact remains that they were not.  And upon this practice of private ownership and appropriation there has been reared an institutional complex long approved and sanctioned by law.  The present owners of land, it may be assumed, received or purchased their land in good faith and contractual expectations, often with capital acquired through alternative income channels.  Are they, then, to be penalized for an ancient wrong -- if wrong it was -- which has been sanctified by the common usage of earlier generations?

But the counterquestion to this is even more cogent: If the present generation becomes conscious of an old injustice, is it powerless to seek redress?  "New time" it has been said, "oft makes ancient good uncouth." 

The answer, in practical terms, is to be found in the equity which can be extended to those who suffer most from social-political innovations.  This is a matter to be determined by a commission of inquiry into the effects of the legislation; it should be in the minds of the legislators who draft the reform proposal; the nature of the equity to be granted will depend upon the provisions of the tax measure; and it will be affected by the give-and-take of the political process in which opposing groups make themselves heard.

Every public policy confers differential advantages and disadvantages upon those who are touched by its provisions.  A decent respect for equity in the present matter, then, requires that the proponents of land-value taxation exercise their utmost ingenuity and technical skill -- not to provide direct compensation as such, but rather to devise fiscal and administrative measures to cushion the shock and to ameliorate the condition of those who stand to lose most severely by the action contemplated.

I do not make this suggestion in a spirit of vague and wishful penance for what is not certain, in practice, to be realized.  Rather, I would recall to us all the wide range of creative and imaginative variations already proposed or practiced in fiscal policies and their administration, through which provision might be made without penalty to the community, for economic equivalents, direct or indirect, to landowners adversely affected by proposed land-value taxation.

The adoption of such provisions, I believe, would not only satisfy our social conscience but would do much to make land-value taxation politically possible.

 

When Historians are Paid $25,000 a Month

He is ignores history is doomed to repeat it.

So those who understand the past ought to be well paid to share their understanding with society.

One of the current presidential candidates claims to understand his claims to a fabulously high income in this light.

His payment came from an entity which thought his intellectual offerings, or something he had to offer, worth the price.

The question is, who is paying the larger price for this?  And why should it be this way?

 

And we need to be thinking about what those who teach history -- and other subjects -- to our children and young scholars ought to be paid.  What do we value? 

• Financial engineering, or physical engineering of various kinds? 
• Medicine or Corporate Finance? 
• Understanding history, or the fine points of real estate speculation?
• Enriching oneself, or acting in ways that create a more prosperous and stable economy for all of us?

 What fields should attract our best and our brightest?  And what should the rewards be?

I heard a snippet on the radio this morning -- something about waking up in the morning trying to figure out how to provide for one's family.  It wasn't about providing trust funds for one's family, but about providing the basics. 

Shouldn't our society's best minds be encouraged to examine our history in search of better ways to structure things so that life is not such a struggle for the ordinary human being?

(And maybe a critical mass would discover that Henry George had some useful and relevant observations and recommendations toward that goal.

What do our college and graduate students learn?

This is a paragraph from a letter my grandfather wrote to a colleague in the mid 70's.  He's writing about a conversation with an economics student:

He is convinced that under the pressure of the massive readings required of graduate students of economics today, these students are necessarily accepting, as valid, current evaluations by leading scholars in judging those of the past believed to be of lesser importance.  They are not going to the actual works of these authors.  Instead they are relying on the judgments of such as Stigler or Heilbroner, for instance, instead of reading George himself.

So how might a student -- or an economics instructor or full professor -- learn about George's works himself?

A fine starting point would be Weld Carter's "An Introduction to Henry George."  It makes no attempts to draw any conclusions; rather, it introduces the reader to what George has to say.

If you teach a college, university, or even high school, course in economics, and you don't include Henry George in what you want your students to know at the end of the term, I commend this to your attention.

Those who do not know history are doomed to repeat it.

He who knows not, and knows not that he knows not ...

Henry Georg's ideas are worth knowing.  You could even fix the world.

 

 

Toward an Ethical Democratic Free Society

Our argument for justice and liberty -- the doctrines of Henry George -- depends upon successfully synthesizing the social sciences and philosophy.  Our scientific work in this area builds us a rostrum from which we can teach the fundamental principles of ethical democracy.   ...

As Georgists we are interested

• in establishing site value taxes and taxes on the economic rent of other resources,
• in determining the economic and social impacts of all other taxes and constructing an intelligent tax system that abolishes speculation and unearned incomes and encourages productive labor, progressive entrepreneurship and socially progressive investments, while bearing the least heavily on labor and capital;
• in promoting the free flow of goods, ideas and people across all boundaries, local and national;
• in reducing State intervention in the economy and society to the minimum and developing effective and socially oriented self regulation in all occupations, professions and industries;
• in reviving mutual aid and substituting it for State aid in the solution of economic, social and personal problems;
• in establishing equality of opportunity in all areas of economic and social life and in ridding the economy and society of all vestiges of monopoly and privilege. 

In a word, we seek to make it possible for each individual to become a free person developing his faculties to the highest in an ethical democratic free society.

 

Social Problems

I came across a nice description of Henry George's book "Social Problems" and thought it worth sharing here:

This work of Henry George is one of the best to give to someone who has no knowledge whatever of the Georgist philosophy.  It consists of 22 essays written in George's down-to-earth language and deals with problems which exist in all generations such as "The Rights of Man," "Public Debts and Indirect Taxation," "The Functions of Government," and "The Increasing Importance of Social Questions."

He tells in such simple and direct language "What We Must Do" about the land problem that it should arouse interest on the part of one knowing nothing of the land question to find out more about it and hopefully become involved in our work.

You can find these chapters online here, with a list of some of the themes in each one.

Government's role

Another quote to share:

Government should be repressive no further than is necessary to secure liberty by protecting the equal rights of each from aggression on the part of others, and the moment governmental prohibitions extend beyond this line they are in danger of defeating the very ends they are intended to serve.

-- Henry George, in his book of essays, Social Problems

Chapter 17: "The Functions of Government"

 

An American Georgist visits New Zealand, circa 1962

Another bit from the old files, this a Wellington, New Zealand, newspaper article, from the Evening Post, dated March 14, 1962.  The files have an itinerary for V. G. Peterson, starting with 2 days in Honolulu, continuting to 14 days in Wellington, 11 in Melbourne, 14 in Sydney, 2 in Singapore, 3 in Bangkok, 1 in Bombay, 5 in New Delhi, 5 in Caiiro, 6 in Athens, 2 each in Madrid and Barcelona, and 4 in Worcestershire, England.  Quite a trip!

American 'Townie' of Walter Nash

One of the highlights of her present visit to Wellington has been, for Mrs. V. G. Peterson, of New York, meeting the Leader of the Opposition (Mr. Nash), whose birthplace, Habberly Valley, Kidderminster, was also Mrs. Peterson's home.

"When Mr. Nash visited his birthplace some years ago, he was made a freeman of Kidderminster," recalled Mrs. Peterson.  "The town regards  him as one of its most illustrious people and is very proud of him."

Another interest that Mrs. Peterson shares with Mr. Nash is finance.  Since graduating from Columbia University, New York, where her father immigrated from England, Mrs. Peterson has enjoyed an interestingly responsible career as an administrator, and has been concerned to a high degree both with fund-raising and land taxation as the executive secretary of the Robert Schalkenbach Foundation.

Mrs. Peterson is interested particularly in the land taxation problem as put forward by Henry George, the Single Taxer, American economist and philosopher, who died in 1897.  He wrote several books on the subject which the Schalkenbach Foundation keeps in print and which are of particular interest in academic studies and seminars.

Georgist theory

Henry George believed that land, being the basis of all wealth, should be made available for the best and highest use, to any person who wished to use it.  He believed that if land values were taxed it would be impracticable for any person to hold more land than he could profitably use and therefore land would be made more easily available for the use of all people.

In Australia and New Zealand taxes are paid on the value of the land and not, as in America, on the improved value.

Discouraged Slums

Mrs. Peterson said that this had the effect of having more and better buildings and the absence of slums.  "I have not seen any slums such as the larger American cities know, since I have been in New Zealand," she said.

One purpose of Mrs. Peterson's visit is to arrange for an academic study of how this method of taxation has worked out in the Dominion.

So far, she says, she has not had much success in this objective as inadequate teaching staffs make it difficult for any other programmes outside of the usual university studies.  Such a survey, Mrs. Peterson said, would be of great value to the American economy.

"In America today there is an awakening interest in land value taxation," she said, and the question is asked, why, with such vast areas, private enterprise cannot get land it can pay for, for housing purposes.  As a result the Government has recommended subsidising housing.

N. Z. independence

"I am greatly impressed with New Zealand.  Just how healthy everybody looks and the sense of independence evident among the people has taken me by surprise,"  Mrs Peterson said. She has also been tremendously impressed with the fact that tipping is not a custom here and with the reply of a porter in another city when unthinkingly offered a tip -- "We earn a living wage here.  We do not have to take tips."

Mrs. Peterson will address strong groups of Henry George followers in Melbourne and Sydney after leaving New Zealand on Saturday.

 

A Penny Post Card

Well, not quite a penny -- and this one didn't have a stamp on it.  It was in a file from the mid 60s, and on the address side had these words:

 

Tax Un-Earned Wealth

To Support Government

Read how to protect

your earned income.

All libraries, or

book sellers. Many

Editions, $1.00 up

Below that was a line drawing of a book, titled "Progress & Poverty" by Henry George. 

You can order P&P hardcopy from Amazon, or from schalkenbach.org -- and you have the choice of the unabridged or a very fine modern abridgment by Bob Drake -- or you can read the book for free at http://progressandpoverty.org/ or http://henrygeorge.org/

See also http://www.WealthandWant.com/

Vie Peterson on Henry George's one tax

I'm reading through some of my grandparents' files of correspondence; they were great correspondents, and kept carbons of their outgoing letters and originals of what they received.  This is an excerpt from a 1957 letter from the executive secretary of a foundation which sponsored my grandfather's work, Vie Peterson (also a wonderful correspondent!) and was written in response to a draft of a document he was assembling as an introduction to Henry George. (A much later version of that paper is available here.)

Vie wrote,

"Should we elaborate why George insisted on one tax? He felt that the economic rent of land was the true national income.  He felt any tax on production was a form of penalty on man's industry and thrift.  He felt that every step forward that man makes in raising himself and in improving civilization as a whole would be reflected in land values and provide an increasing source of revenue which he believed would be sufficient for the national needs.  As a family lives on a set income, George believed that a nation should do likewise.  It would be necessary, it seems to me, to indicate that at the present time with the national debt so high and with other complications a tax on land values alone might not be sufficient, but the purpose of this statement is to show what George had in mind in his day which was not burdened with debt as is our own?

 In another, slightly earlier, letter, Vie writes,

"... George believed that easy access to land would overcome unemployent, would eliminate reliance on government aid, and therefore simplify government structure, etc. "

 

Some thoughts from Martin Luther King, Jr.

All progress is precarious, and the solution of one problem brings us face to face with another problem.
                            --Martin Luther King, Jr.

Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.
                            --Martin Luther King, Jr.

History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people.
                            --Martin Luther King, Jr.

These came in a weekly newsletter yesterday.

The first quote got me thinking about Henry George's book of essays entitled "Social Problems," and about those on the U.S. Supreme Court who proudly regard themselves as "originalists," who, it seems to me try to solve 21st century problems working with the written words and experiential constraints of 18th century politicians.   It also leads me to think that things might not be as precarious were more of us in 21st century America to have the advantage of knowing Henry George's ideas, which were widely known and discussed 100 years ago.  I've been exploring a lot of material put online by Google Books, and am amazed at the extent to which the movements that George inspired and the ideas he formulated were context for so much that was published and discussed in the 1880-1920 era -- and that someone who hasn't read at least Progress and Poverty (George's 1879 best-seller) and digested its significance -- will miss a lot of what many, many* writers of that era are saying.  I doubt that it shows up in a lot of college history or American Studies curricula -- and where it does, probably requires it to be read in a week or less and discussed in a single lecture.  Yet its significance is broad and deep, as well as wise and just.

*When I first started searching in Google Books' offerings, I found such an amazing amount of material that I wondered whether there was someone within that organization who had a particular interest or affection for these ideas.  I soon realized that this wasn't the case; it was simply part of the air everyone breathed in that era.  I had heard that, but didn't really process it until I started to see what libraries had!

Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.

What strikes me today about this statement is the extent to which many people who Georgists recognize to be oppressed by the way our society structures itself don't even see those structures or their effects.   And that same observation applies to the third quote:

History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people.

My train of thought then veers off to "The Landlord's Prayer."

Man and his Mother Earth

This sermon identifies a/the source of something I posted a few days ago. It also fits in well with the "Earth for All" Calendar.

Man and Mother Earth
Albert H. Jenkins
[A sermon delivered at the Davies Memorial Unitarian Church, Washington, D.C., 7 October, 1962. Published by the Robert Schalkenbach Foundation]

When Khrushchev was here several years ago, he repeatedly said that in the United States "capitalism has replaced feudalism." Our newspapers and most of us accepted that statement as a self-evident fact, but I believe Khrushchev was mistaken.

I believe feudalism persists here in the midst of capitalism, and from this, I believe there flows a moral and economic wrong so enormous and fundamental that it is poisoning our human relations and destroying our civilization as it has destroyed other great civilizations in the past.

Of course, we do not have the outward and visible signs of ancient feudalism -- publicly recognized categories of kings, nobles and serfs. But though feudalism was a social system, it was basically an economic system also. It was the power of some men to command the labor of others through the ownership of land -- the Mother Earth of us all.

Does that power still exist today, right here in our own country as well as in others? If so, to what extent and with what results? Before we attempt to answer these questions, let us be good scientists and get our definitions straight. Let us get our mental feet on the ground and start from there.

For that purpose, we have the simple visual aids you see before you. The first is a global map of the earth. It represents what the economists call LAND.

That term includes not only the earth's surface, which is what most people think of as land, but also all of Mother Earth's other natural resources -- oil, natural gas, ores and minerals, water, and even the air we breathe. Everything on which and from which man lives and without which he cannot live, is LAND.

You will recognize the second visual aid as Rodin's "Thinker." However, I had our cartoonist put a suit of blue overalls on him. That is because he represents man as a worker of hand or of brain, or both. In short, he is what economists call LABOR.

LABOR, working on land - the surface of the earth and its natural resources - produces what is called CAPITAL. This term is represented by the railroad locomotive in the third visual aid.

CAPITAL, in the economic and real sense, is not money, nor stocks, nor bonds. It is factories, machines, railroads, trucks, ships -- anything which, after it has been produced from land, is used for further production, transportation or distribution of either capital goods or consumer goods.

Of this economic triumvirate -- land, labor and capital -- the most fundamental is LAND, because it is the source of everything else. Yet, nowadays, the land factor is almost forgotten in our economic controversies. That is understandable for several reasons.

First, in our complicated civilization, most of us are out of touch with land. It is buried under buildings and pavements in our cities. And everything we buy from outside our cities comes to us so many steps removed from the land that we seldom think of the source -- our Mother Earth.

Second, the most continuous and conspicuous economic controversies today are between labor and what labor thinks of as "capital" --the owners and managers of industry and business. Workers are in direct contact with employers in their daily lives, and winning wage raises and fringe benefits is the "bread and butter" of labor leaders.

Likewise, employers are constantly pressed by "labor problems," which concern them obviously and directly.

So it is natural that workers and employers seldom stop to think that the economic share they are quarreling about is what is left after landowners and land speculators have taken their portion, which comes first because they control the source of all things, and labor and capital can produce only by buying their permission to use the land.

That brings us to our fourth and last visual aid, this sketch. The water pouring into the bucket represents the hard-earned fruits of labor and capital working together in all stages of production. The water going out through the hole in the side of the bucket represents the unearned tribute taken by the modern feudal landlords. They get their share first. What is left in the bottom of the bucket is what labor and capital must divide between them. They quarrel over it, not realizing that both are being robbed by a third party who contributes nothing to production. Obviously, when someone gets something for nothing, someone else gets nothing for something.

Now, as our next step toward answering the question whether feudalism persists in the midst of capitalism, note this well, for it is the first of two key points:

• No man created the land -- the earth. It was here millions of years before any man lived. Therefore, no man has a moral or an economic right to say to others: "Pay me for the privilege of living on the earth and using its natural resources."
• The second key point is this: No man creates the money value of the land he owns. That value is created by the needs and deeds of all the people in the community and the nation, in both their private and their public capacities.

As more people are born in or move into a community, the price of the land in and around that community goes up because more people need it to live on, to buy for houses, factories, shops and other purposes. The community itself must establish streets, schools, parks, etc.

Federal and local tax money spent to put up a school, a post office, a government defense plant, or to establish or maintain a police or fire department, boosts the value of all nearby land. The man who spends his money to build a house raises the price of the vacant lot next to it. Landowners and speculators reap an unearned and increasing harvest from these activities.

In effect, they command the labor of other men through their ownership of land, and that is the essence of economic feudalism. The same is true of men who charge other men ever-increasing prices for using the oil, gas, minerals and other natural resources which, by moral and economic right, over and above the cost of extraction, should be the free gifts of Mother Earth.

Now let us bring this down to your own experience. Many of you own a house. You remember its price. Suppose it was $15,000. Little more than a decade ago, in 1950, the price of the lot averaged about 10% of the total cost of the new home. Now the lot cost has doubled to 20%, and is still rising.

At the 20% figure, the buyer of a $15,000 house pays $3,000 for the bare land on which it was built. How long does it take you to earn $3,000, or to save it out of your earnings? For that length of time, if you were that home buyer, you were the feudal serf of the man who sold you the land on which your house was built. In return for your $3,000, he gave you nothing but his permission to use land which he did not create, and the money value of which he did not create. He commanded, and if you have not yet paid off the mortgage, is still commanding, your labor for the time it takes your hard-earned savings to add up to $3,000.

And that's not all. That $3,000 was added to your mortgage. If it's a long-term mortgage, the interest you will have to pay will about double the final land cost to you. Therefore, as a result of the persistence of economic feudalism in this country, the former landowner and the mortgage moneylender are commanding your labor for as many months as it takes you to earn and save $6,000, If you live in a house as a renter, you pay the land cost, too.

Here's another example, from my own experience. In 1926 the railroad labor newspaper I work for bought a piece of land on Capitol Hill, right across Independence Avenue from the House end of the Congress building. That was an absolutely unique location having many advantages, but this land cost us only $24,000.

About 30 years later, Congress ousted us in order to put up the third House Office Building. We looked around for a site for our new building, and were offered a piece of land below Capita! Hill, across from the Capitol Plaza, and comparatively distant from the center of things and from the Senate and House office buildings.

That location is not unique in the way that our original one was and is far inferior in all respects. But the price asked was $1.5 million. That was too much for us, but later this same land was bought by the Carpenters' Union and we may suppose that they paid at least what was asked of us.

That huge sum will come out of the dues paid by the union's members. Land costs always come out of someone.

For our new building we finally bought a plot at the corner of First and D Streets, Northwest, still more distant from Congress and still more inferior to our original land, and very little larger. Yet the price was nearly $400,000.

The difference between that price and the $24,000 we paid 30 years before has to be made up by raising the price of our paper to its subscribers.

Now let us look at an example which concerns everyone of us in this room this morning. You know how hard we are trying to pay off the mortgage on the site we are buying for our church. A few years ago we would have faced no such obstacle because the price of suitable land would have been only a few hundred dollars. Ye we had to pay $16,000 for it and were lucky to get it at that.

Why? Because the owners and speculators in land for mile around Washington are holding it for unearned profits and in that way are creating an artificial scarcity of available land. They know that the population of this area is growing and that the need for land for useful purpose is increasing. So, the longer they hold out, the higher will be the prices and profits they hope to get.

What can, and what should be done to end this deadly hang-over of economic feudalism? Most liberals and labor spokesmen, unfortunately, offer no real remedy, only temporary palliatives which make the patient worse in the long run.

What they propose, and often get, are public subsidies and government guarantees to give the economic system a "shot in the arm" when it is being slowed down by rising land costs. Such artificial stimulation boosts land prices still higher, requires ever-increasing doses, and merely postpones the day of reckoning.

The government housing programs, particularly those for slum clearance and urban redevelopment, are good examples of how land profiteers are subsidized with public money supplied by the taxpayers who will take the losses if land speculators and mortgage-moneylenders run wild and cause a crash.

As a matter of fact, more and more urban redevelopment projects are being promoted by smart real estate operators. A public body buys the land at a high price, pays the heavy expense of clearing off the old buildings, then sells the land to a private developer at a fraction of the price the public body paid for it.

There just isn't enough public money to go very far in that kind of program, and slums are spreading faster than they are being cleared. Such a system has not worked and will not work.

Right here in Washington, the Washington Post recently reported that "Nathan Bernstein and his wife became the first individuals to get a piece of the vast southwest redevelopment project." They bought about three-fifths of an acre for $139,000. That's at the rate of more than $230,000 an acre, or $5 a square foot. And, since the report describes Bernstein as a small businessman, it seems obvious he got some of the least costly land in competition with wealthy real estate corporations.

Such huge land costs have two results, among others.

• First, even with the public subsidies, apartments built by private redevelopers must, and do, rent for far more than can be paid by the low-income families for whom they are supposedly provided. In Washington's southwest redevelopment area, which is in this category, rents are reported to be as high as $300 a month.
• Second, the comparatively low rents in publicly-built and publicly-owned housing require not only public subsidies for buying and clearing high-priced land, but also a continuation of these subsidies to keep the rents within reach of low- or even middle-income families.

Something different -- a real, fundamental remedy -- is needed. What can it be? Let us approach an answer in this way:

Slum property yields its owners profits of between 20 and 25% -- far more than any other kind of stable investment. That is largely because the more the buildings deteriorate, the lower their value is assessed, and the lower the taxes will be. Thus, the owner is rewarded for being a "slumlord" more ruthless than ancient feudal landlords.

But suppose this slumowner spends some of his money to convert his wretched old buildings into decent dwellings, or tears them down and puts up new ones? Either way he has not only increased the supply of good housing but he has also provided employment for workers in the building trades and in industries which fabricate and transport materials for construction. He has benefited manufacturers, merchants, architects, engineers and other professional men, as well as the economy in general.

Instead of being rewarded, however, this owner who redeveloped his slum property is penalized. The assessor comes around and boosts his valuation and from then on he must pay an annual fine in the form of increased taxes. In effect, he is treated as though he had committed a crime.

This tax system is upside down, according to a school of economic and moral thought fostered by the teachings of Henry George, an American, who long ago wrote a book entitled Progress and Poverty. It aroused controversy in its time, but has produced practical results in some parts of the world, and its teachings are now having a revival in our own country.

Those who agree with Henry George maintain that the man who should be encouraged and rewarded is not the one who lets his slum property run down, but the one who does a favor for everyone by improving his old buildings or tearing them down and putting up better ones.

How would this be done? By taxing the land under the buildings at its true economic value, which is usually much higher than the assessed value, and taking taxes entirely off the buildings or other improvements.

At first that may seem to be a startling thought, perhaps even an unjust one. But remember this, there is a fundamental difference morally and economically between land and buildings. No owner created his land, and its money value was created by the whole community. Is it unjust then for the creators of that value -- the people of the community -- to get the annual return on it in the form of taxes?

In contrast, buildings and all other improvements are man-made. They would not exist unless individuals had invested money and labor in them. When the community taxes them, it is taking something the community did not create.

The purpose of the tax system which Henry George advocated goes far beyond clearing slums by reversing the impact of local and state taxes. Its purpose is no less than to end persistent economic feudalism and its attendant evils. It proposes to do that by making it unprofitable to hold land out of use, or to use it inadequately while waiting for increasing population and public need to boost its selling price.

If landowners and speculators had to pay more taxes on their land, they would sell much more cheaply to people who need land for use. Thus taxes on land values tend to reduce land prices and the cost of living. In that respect, land values are unique. All other kinds of taxes in whole or in part operate to raise prices and living costs.

There is an old and true saying that "the power to tax is the power to destroy." Every dollar of tax destroys something for better or for worse. The question is what do you want to destroy -- the productive activities of labor and capital, or the feudalistic obstruction of men who command the labor of others through landownership and speculative profits?

Federal taxes as well as local taxes are full of favors for landowners and land speculators. Here is just one example:

Earned income pays federal tax rates ranging from 20 to 91%. Unearned profits from land pay only the capital gains tax, which ranges up to 25% at the most. What is more, Uncle Sam gives back to the landowner much of the local real estate taxes he has paid, because such taxes are deductible from taxable income. Thus a wealthy land speculator in the 50% tax bracket, in effect, deducts half his real estate tax from his federal income tax.

More and more people are awakening to the problem of economic feudalism and are seeking its remedy. I only wish I could say that the liberals and the laborites of our country were leading the search.

House & Home, a monthly magazine covering all phases of the home-building industry, is a Luce publication, and as such would generally be considered conservative. But on the land and tax question, House & Home is "radical" in the old American sense of that word, meaning that it goes to the root of things, seeks out and tries to remedy causes.

Through its intimate and practical knowledge of the home-building industry, House & Home became convinced that this industry is being strangled by high and rising land prices, and that the only cure is to tax land values more and houses less. It printed a whole special edition on that subject in August, 1960 and called the land speculator "Public Enemy No. 1."

The Reader's Digest, scarcely a liberal magazine, recently published an excellent boil-down of the House & Home material under the title "Land Speculation and How to Stop It."

Feudal lords, big and little, are exacting more and more billions of tribute from the rest of the people. This will get worse as the population explosion puts heavier and heavier pressure on the land and other natural resources.

Warnings of this came long ago from the classical economists. One of them, David Ricardo, put it this way:

Advancing wealth and productivity bring more people, but they do not bring more land. As a result, those who own the land can command an ever greater return for an increasingly scarce resource. Meanwhile, capital and labor conflict with each other for the rest of the product, and get smaller and smaller shares while the landowners get more and more.

Therefore, Ricardo said, "the natural price of labor is that price which is necessary to enable the laborers … to subsist and perpetuate their race." This came to be known as his "iron law of wages."

Ricardo and other classical economists correctly foresaw that in times and places of rapid economic growth and relative scarcity of workers, wages could rise temporarily. But now the population explosion is on full blast and the industrial revolution, instead of creating more jobs, as it formerly did. is resulting in millions of workers who cannot find jobs even at Ricardo's "subsistence wage."

This economic insecurity will continue and grow worse until the land and tax question is answered, and answered right, for it is the inevitable result of the economic feudalism which has cursed mankind throughout the ages and lingers on in our own country.

Things move fast nowadays, and the time is growing short. Dare we delay too long in solving the biggest and most fundamental of our economic and moral problems -- the problem of Man and his Mother Earth?

Today's economic problems aren't new

Today's Economic Problems Aren't New.

Today's economic problems aren't new. America's economy crashed in 1819, 1837, 1857, 1873, 1893, 1907, 1920, 1930, 1955, 1973, 1981, 1990, 2001, 2008.... each crash different in detail, but similar overall: People willing and able to work could not find the op­portunity they needed and were thus thrown into poverty. And even in good times, mil­lions of willing American workers remain unemployed. The cause of economic difficulty is no mystery. Nor is the remedy. Philosophers, and even some economists, have understood for decades what opportunity really is and how it can be assured for all. One of the greatest writers on this subject was Henry George, and his book, Progress & Poverty, provides an excellent framework for under­standing the problems we face today.

This is from the announcement of a 5-Saturday course which uses "Progress and Poverty" as its textbook, offered at the Blue Island Public Library, starting at the end of January.  It is being offered by Chuck Metalitz and David Harrell of the Henry George School of Chicago.

The page continues,

Course Outline
We start with a discussion of the problem: Why has our nation, despite its enormous pro­ductive power, failed to provide to everyone the opportunity to earn a living wage? And why does our economy crash periodically, causing even more poverty and economic misery? We evaluate current explanations, and find them unsatisfactory. Using the tools of classical economic analysis, we determine the fundamental natural laws which limit how much people can earn, and see how progress can actually worsen poverty. Does that mean technological progress must be stopped? Of course not. Reasoning from morality as much as practicality, Henry George proposes a pro-liberty, anti-privilege public policy which can end poverty while increasing the general level of pros­perity. We discuss and evaluate this proposal, in theory and in practice, for the 21st century. The main text we use is Henry George's original Progress & Poverty. For several years after its original publication in 1879, this book was an American best-seller. Although the original 19th-century text is a classic, many of our students choose instead to read an edition “abridged for modern readers.” You will be amazed how George's analysis is spot-on to 21st-century issues. Supple­men­tary notes are also provided to clarify and update as needed. And the instructor will thoroughly discuss all the important points in the class.  

What you will learn

• You will learn a method of reasoning that is useful in understanding all sorts of community problems.
• You will know the mechanism by which poverty tends to worsen as the economy progresses, and why programs aimed at alleviating poverty are unlikely to succeed.
• You will see the inherent contradictions which cause most “economic development” programs to fail.
• You will understand the fundamental cause of the ongoing financial crises.
• You will know why similar crises occur repeatedly, every decade or two.
• You will recognize that honest and efficient government, improved public education, and many other desirable reforms cannot by themselves bring prosperity nor end poverty.
• You will have a better understanding of the economic system under which we live.
• You will know how Liberty and Justice are essential elements of any system which works for everybody.
• You will have understand and have evaluated for yourself a method of method of public finance which many claim would end poverty and prevent financial collapses.

What you won't learn

• You won't learn any sure-fire method for getting rich. However, you will gain knowledge which may help you prosper personally.
• You won't learn a magic formula for peace and prosperity. But you will have a better understanding of concepts which are essential for making peace and prosperity possible.

If you're in or near Chicago, check out the class. (You'll also find classes in NYC.) Otherwise, you might explore these ideas on your own.

Progress & Poverty at the Henry George School
Where adults learn how the economy really works
Henry George School of Chicago
28 E Jackson Blvd #1004; Chicago 60604 hgchicago.org 312/362-9302
Anti-privilege, pro-liberty education since 1934

In Arden Town (1914)

I stumbled across this one by accident, and thought some might enjoy it.  Arden is a community on the north side of Wilmington, Delaware, USA, near the Pennsylvania border.  In more ways than one, it is the high point of Delaware.  (For a more contemporary look at Arden, check out the 2007 article in Delaware Today with the tongue-in-cheek title, "Hey, Where are All the Nudists?") Mike Curtis, whose essay, Taxes Kill Jobs, appears a few items below this one, lives in Arden.

The quote about "the land belongs in usufruct to the living" is from Thomas Jefferson.  You can read more about the idea here.

http://paperspast.natlib.govt.nz/cgi-bin/paperspast?a=d&d=EP19140509.2.122

1914-05-09

Evening Post, Volume LXXXVII, Issue 109, page 10

In Arden Town
Bird and Bush Life Sacred
Single Tax in Practice

Florence A. Burleigh contributed to that staidest of American journals, the Springfield Republican, a most interesting article on the Town of Arden, which is in Delaware.  In May, 1900, Frank Stephens and Will Price, artists, who had long dreamed of a village colony where love and justice should take the place of strife and injustice, found a piece of land near Wilmington, Delaware, which they immediately secured and started what is now a busy little village of 120 leaseholders, about 60 dwellings and 250 residents, 80 of whom remain all winter.

These two men had for many years believed that "the earth belongs in usufruct to the living," and with Henry George that the only way to secure this was for landholders to pay to the community annually the value of the land they held.  They also believed that art, music, and the drama were a very important -- indeed, the most important -- part of life and they agreed with William Morris in his "News from Nowhere" when he said, "We like these pieces of wild Nature and can afford them, so we have them. . . Go and have a look -- and tell me if you think we waste the land by not covering it with factories for making things that nobody wants, which was the chief business of the 19th century."  So they set apart a green in the centre of the 160 acres -- a part of which was for sports and an outdoor theatre -- and much of the woodland.

For a few years Arden remained scarcely more than a dream; but one by one little picturesque bungalows appeared and soon an inn or "guest-house" was found necessary in order that visitors might find an over-night shelter and a simple meal.  Next came a club house, planned and made by the Ardenites out of an old but substantial barn standing on the place.

Various industries -- carpet weaving, leaded glass, cabinet-making, etc. -- are carried on and many of the leaseholders have little gardens.  There are at present a craftsmen's guild, having in charge the village industries, a folk guild, having in charge matters concerning hospitality and entertainment; players' guild, having charge of the dramatics; gardeners' guild, "including tillers of the soil and those who tell others how to"; a housewives' guild, scholars' guild, educational  work, and several other guilds.

The woods are kept free from underbrush but otherwise are left untouched and no one is allowed "to hunt or fish on any of the lands of Arden, or cut timber or fence in woodland or keep the land in such disorder as shall in the opinion of the majority of the residents of the community be injurious to the rights of others."

A clearing the form of an ampitheatre with evidence of numerous fires in the centre of it is the place where, every Sunday evening throughout the warm season, the Ardenfolk and their guests go with lanterns and rugs to watch the big fire which is built by some of the young men and boys, and sing from the Arden song book or listen to readings from Uncle Remus or other books for an hour.  As the fire dies down, the ghostly folk file slowly back with their lanterns through the dark wood and soon there is no sound but the crickets or an occasional owl.

Saturday night is devoted to the open-air theatre, which is in the centre of the green and has a grassy stage about 20ft long, with a large rock at the back, and exits made by openings in the shrubbery. At each end of the state, which is footlighted by large oil lamps with reflectors, is a white column which gives dignity to the place.  The seats are built in a semi-circle -- or, more strictly speaking, the long bench, for everything is quite primitive -- and the "front row" is cut out of the earth and grass-covered.  The players file to the theatre and across the stage, already costumed, and the play begins.  "Julius Caesar," "The Merchant of Venice," and "Romeo and Juliet" are the favorites; and if this might seem ambitious, the reply would be that the object is not so much the entertainment of the audience as the education of the actors.  When the play is over -- and as it begins early it ends early -- those who care to adjourn to the clubhouse to dance.  The plays, the sports, the pageants, and the campfire -- all are as much a part of Arden as the industries, and "the spirit of Arden pervades everything."

One of the dreams which has not yet been realized but which is surely going to be is a church on a sunny slope which shall be open at all times for anyone, no matter what his creed, who cares to enter in.  The design is already chosen, square-towered and of stone, early English.

ONLY LAND IS COMMON.

But there must be a business side to every such undertaking and Arden is no exception.  It is not a community in the sense in which the word is often used, for nothing is held in common except the land, and one of the strongest beliefs is that of individual freedom so far as it is consistent with the equal freedom of everyone else.  Even one's time is his own, for it is an unwritten law that no one shall interrupt another in his own domain when the warning white flag is at the door.

One enters Arden from the country road, by means of steps over a stone wall under a rustic arch upon which is cut in graceful letters, "You are welcome hither."  The path winds under large oak and chestnut trees past blackberry bushes and, in the fall, goldenrod and asters.  The visitor usually arrives in Arden later than the resident, because he has been obliged to stop on the way to pick flowers or admire the beautiful surrounding country.

The visitor passes one or two little cottages right up to the shop, which often is called "the red house," and he has his first view of Arden.  He sees the green with the wood at the rear, but otherwise surrounded by "the Admiral Benbow," "the lodge," "the monastery," the picturesque rough-plastered inn, "the Homestead," and other cottages of varying size and architecture.

THE LAND LAWS

Land cannot be bought in Arden, but all lots are assessed to "equal as nearly as possible the full rental value of the land, excluding improvements, and the rentals so collected shall be expended in the payment of all taxes, so far as said rentals will suffice, so that the leaseholders shall be exempt and free of all direct taxation to that extent, and thereafter for such communal purposes as are properly public in that they cannot be left to individuals without giving them an advantage over others."

Although Arden is a single tax colony in the sense that no one pays any direct tax except that on land values, among the residents are Socialists as well as Single Taxers, and people of no definite economic belief who go there to enjoy the freedom from conventionality. All the sites are taken for 1914, the rents amounting to £400.  Besides the little homes, the inn and the guild-house, are a laundry, a summer school, and the craftsmen's show, which has a dozen rooms for bakery, store, studios, and for rug and furniture making.

EDUCATION SYSTEM

The "organic school" is unique in that no desks were used, only tables and chairs, and that the children have to be sent home instead of being sent to school.  Occupations take the place of lessons, on the principle that the conscious reasoning into which the children are plunged upon entering school retards the development of the reasoning power for some years.  If occupations were substituted for 'lessons' the reasoning power would develop unconsciously and naturally, thus insuring a stronger fine mentality.  Children should not consciously strive to know any more than they consciously strive to grow.  Singing, dramatisation, stories of literature and history, field geography, and Nature study in the form of walks -- observation and investigation, gardening, creative handwork, art work, and fundamental conceptions of numbers, may occupy the children from six to nine years of age, without the use of books, excepting where the child really desires to learn to read.  At nine or ten the child may come into the use of books, not by having 'lessons' assigned, but for the pleasure of finding out what the books can tell with the assistance of the teacher.

The affairs of the town are managed by three men, one of whom is chairman.

The Evening Post was founded by Henry Blundell and began publication as a daily in Wellington on 8 February 1865. Blundell was born in Dublin in 1813 and worked for nearly 30 years at the Dublin Evening Mail. In 1860 he migrated with his family to Melbourne. Blundell moved to New Zealand in 1863 and worked on the Otago Daily Times.

Taxes kill jobs

This came by email today, from my friend Mike Curtis, and, with his permission, I'm sharing it here:   Dear friends and acquaintances:     I am daily reminded of the passage: “the only thing that is necessary for evil to prevail is for too many good men to do nothing”  I just heard on the radio that science is advancing in the realm medicine, energy, and agricultural.  We are now able to multiply productivity in manufacturing due to the use of robotics.  Yet in spite of all the gains in material progress poverty is increasing.   “It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.”   “This association of poverty with progress is the great enigma of our times. It is the central fact from which spring industrial, social, and political difficulties that perplex the world, and with which statesmanship and philanthropy and education grapple in vain. From it come the clouds that overhang the future of the most progressive and self-reliant nations. It is the riddle which the Sphinx of Fate puts to our civilization and which not to answer is to be destroyed. So long as all the increased wealth which modern Progress brings goes but to build up great fortunes, to increase luxury and make sharper the contrast between the House of Have and the House of Want, progress is not real and cannot be permanent. The reaction must come. The tower leans from its foundations, and every new story but hastens the final catastrophe. To educate men who must be condemned to poverty, is but to make them restive; to base on a state of most glaring social inequality political institutions under which men are theoretically equal, is to stand a pyramid on its apex.” Henry George 1879 (Progress and Poverty)   I am not running for political office, but if I can enlighten anyone, I believe my efforts will have been worth it.  The following my reaction to  the prevailing wisdom from all the presidential candidates, including the one in the White House.   If you think my thoughts are worth consideration, please let me know, and forward them to others.  If you think I’m wrong, please let me know where I went wrong.   Merry Christmas, Mike Curtis     Taxes kill jobs "Taxes kill jobs" is the message of political candidates.  The American economic system causes unemployment and  recessions; that is true, but without revenue and the role of government the U.S. would surely be a third world country.   However, there is one tax system that actually creates jobs.  It’s not based on the socialistic principle of “Ability to Pay,” like most of our taxes.  It’s based on the value of the “Benefits Received” by the tax payer.  It’s doesn’t confiscate a percentage of income, taking more from those who have a greater income, even when the benefits they receive are the same as others.  It doesn’t tax wages, which are the earned income of labor; it doesn’t tax  buildings, machines, or inventories, which were acquired from the people who made them; It doesn’t tax sales or consumption, which is the only reason anyone produces anything.   It is simply a charge for the value of the opportunities to which the taxpayer has been given exclusive control.  It is a tax on the value of land.  It can be taxed at 100% without in any way adding to the cost of production.  It doesn’t add to the value of land or the value of things produced on the land.  It simply collects what would otherwise go to the holders of land as an un-earned income when the land is actually used.   It insures that the government has ample revenue for the legitimate needs of society, while limiting the government to those values which cannot be attributed to the efforts of individuals or corporations, but are socially created by the community as a whole and attach to the land.  It cannot be evaded, because the land cannot be hidden.  The reason wages no longer rise as inventions and new technologies increase the results of labor is because people have no independent way to employ themselves. If you’re among the least skilled workers, no matter how little machines cost or how much those machines increase the results of your labor, you have to bid against other people who want the same job; the result is that wages tend to a bare minimum -- superseded by the legal Minimum Wage.   For workers with superior skills and knowledge, those with whom employers can increase their profits, it is simply a matter of supply and demand.  The higher the pay, the greater the incentive to learn the skill and acquire the knowledge.  The wages of any qualified worker will be determined by two opposing factors.  First, the demand for the goods or services they produce will encourage employers to offer wages that tend to equal the greater value of their contribution to the product or service.  But, as the higher pay stimulates others to acquire similar skills and knowledge the increased supply of superior workers competing against each other, brings wages down until the wages that reward the special skill are no longer high enough to stimulate others to acquire the same skill and knowledge required for the job.  Remember when computer programers earned twice what they do now?  The supply increased and their wages went down. They still make more than the average worker, because it’s not so easy to learn computer programing. The supply has not exceeded the demand. Although the vast majority of workers have no way to employ themselves, and the general level of wages haven’t increased in 40 years, it is not a natural law that wages will always tend to remain static.  The United States has 700,000 square miles of arable land.  That is less than 450 people per square mile.  France has more than 850.  The U.K. has more than 2,500 and Japan has more than 7,500 people per square mile.   All production takes place on land.  The reason why more workers are looking for employment than landowners are looking for workers is that an enormous portion of the arable land in America is unused or grossly under used; simply held as an asset.  Suppose that cities were developed to their full potential. The slums with empty houses and abandoned factories were redeveloped to their full potential; the surface parking lots were replaced with multi-story parking garages; the grossly underdeveloped sites in the high-rise business districts were put to their highest and best use.  Suppose the suburbs were carefully planed and developed with wooded and open parkland instead of relying on land speculators posing as farmers to provide open space; suppose we eliminated sprawl with its leapfrogging patterns that increase the cost of the infrastructure, waste land, and separate people from work and social relations; suppose we created a disincentive to hold idle, mineral land that increases in value.  That is to say: What would happen if the majority of now privately held idle land was put to good use?  It would generate an increase in the demand for labor and create job opportunities for everyone who was willing and able to work. What is required is a shift from confiscatory taxation, which we now have, to a revenue system that is based on the value of land, which measures the value of the benefits received by landholders from society.  Land values include the surface rights, mineral rights, and all other natural opportunities like the electromagnetic spectrum used for communications.  Under this proposal, the rental value has to be paid whether the land is used or not.  While the payment of rent is a payment for a benefit received, for those who leave their land idle, it becomes a penalty, and that insures an ample supply of land for all who need or want to use it. It also insures that all workers and the owners of productive capital get to keep everything they produce by taking advantage of the natural opportunities that are equally available to everyone else.

Seeing the Cat

Georgists use this expression as a shorthand for the "lightbulb moment" when they saw the magnificence of the ideas we seek to share with others.  I came across a re-telling of it that is a little different, and thought it worth sharing.  It appeared in The Twentieth Century Magazine, in 1912 -- well after the event.  The author is Benjamin O. Flowers, quoting Hamlin Garland, quoting Judge Maguire, of San Francisco (who, if memory serves, went on to be a congressman).

To return to Hamlin Garland. He was at that time strongly under the influence of Henry George's noble economic philosophy and full of faith and enthusiasm for that broad freedom that is vital to the happiness of the individual and to the fullest unfoldment of brain and heart. He became a frequent visitor at my home, and I cherish the memory of many happy hours spent with him.

I remember that on one occasion, when he was spending an evening with us, Mrs. Flower asked what he meant by the expression, "He had seen the cat," which occurred in one of his stories. And Mr. Garland laughingly told the story of how Judge Maguire of San Francisco had come to New York to address a great gathering on the single tax, and during the course of his lecture had said:

"The other day I was walking down Broadway and saw a crowd of persons before a window in which hung a large framed landscape. Under the picture was the legend, 'Do you see the cat?' No one in the crowd seemed to be able to find anything resembling a cat. At last I stepped into the street, some distance from the picture, when the entire white outline assumed the form of a large and perfectly proportioned cat. I could no longer see anything but the cat; it filled the picture.

"And so," said the Judge, "it is with the single tax. When you once understand the philosophy, palliative and make-shift propositions fade into the background before this great and fundamentally just philosophy that squares so perfectly with the theory of democracy and the noble demands of freedom."

"From that time," said Mr. Garland, "the question, 'Have you seen the cat?' became a common expression with the single-taxers, and buttons, like the one in my coat, bearing a cat's face, are now worn by many of us."

Have you seen the cat?

Opportunity has a name: it's called land

I just came across this website for the (Australian) Association for Good Government -- and thought it worth sharing.

Opportunity has a name: it's called land.

The philosophy and economics of Henry George is simplicity itself.  But this does not mean it is in any way superficial; quite the contrary.  It begins with the simple proposition "I have a right to use land".  Think about it.  Isn't that proposition as basic to life as "I have a right to breathe"?

You might agree too that these are our birthrights.  They emanate from our nature as human beings so George calls them natural rights.  Because we are many our natural rights must be equal rights.  Now George argues that the equal right to use land requires an adjustment to one of most basic institutions, private property in land.

Not that the State should own land and lease it out.  Neither private property in land nor public ownership of land can give equal rights in the use of land.  Instead, if the market value of the land we use was public revenue each of us would have equal rights in private property.  That is, it would not matter whether you owned a mountain of iron ore or the most valuable block in the largest city, by taking its land value (not improvements) its owner would be left with no more land value than the householder on the fringes of the city or the resident of the poorest country town.

Public revenue from this annual value (its capitalised value is over $3 trillion in Australia) could replace all taxes upon our labour and our expenditure.  

If you think about it land value is only the value of location.  It comes from either nature or our community.  For example, a new motorway between two cities inevitably creates land value.  This value deserves to go to the community that made it.

George follows Thomas Jefferson in calling for equal rights as the key to the solution of social problems.  You may be interested to help make equal rights a reality.  If you are please contact us.  We welcome everyone who is seeking social justice.

Richard Giles, Secretary

Is inequality an inevitable byproduct of growth?

Recession Crimped Incomes of the Richest Americans - NYTimes.com.

Pointing to the recent declines at the top, Mr. Kaplan argues the Occupy protesters have accused the wrong villain by focusing on inequality, which he called an inevitable byproduct of growth. “If you want to reduce inequality, all you need to do is put the economy in a recession,” he said. “If you want the economy to do well, as all of us do, then you’ll get more inequality.”

Well, maybe at the University of Chicago, that is what is taught, but is it true? 

It may be inevitable under our current structures, but if one gets outside that box, and looks deeper, one finds other answers.

I would suggest that Mr. Kaplan, who teaches economics at the Graduate School of Business at the U of C, look  beyond the interests of the university's and b-school's founders and big donors and alumni and current students, and consider that we're all in this together, and that when we permit a few to monopolize and privatize things which rightly are our common treasure, inequality is the inevitable byproduct.

Mr. Kaplan might start by exploring the ideas of Henry George.  They were in his freshman economics texts, but most likely his instructor didn't lecture on them, or include them in exams (most likely because his own instructors hadn't!)

Read what those textbooks have to say, and then think about whether it is in Mr. Kaplan's personal career interests to speak of an idea that could rock the yachts of alumni and donors and others who like our current structures just fine, thank you!  The privileged like their privileges, and would prefer that we not notice that they are privileges, or, if we do notice, think that THEIR privileges are somehow in OUR best interests.

An impolite fiction!

Wealth Concentration and Trinity Church (Wall Street)

When I heard that Trinity Church was not particularly keen on hosting the Occupy Wall Street protestors, I was not overly surprised.  Years of watching Louis Rukeyser's "Wall Street Week" with the opening scenes of Trinity Church, and a reading of Thomas Shearman's 1889 article "The Owners of the United States" (below, posted on October 6),passed through my mind.  Shearman was the co-founder of Shearman and Sterling law firm, and was a highly respected legal scholar of the late 19th century.  He also wrote some fine books

Here are some relevant paragraphs:

The figures indicate the wealth believed to be possessed on the average by each of the persons whose names follow:

	$150,000,000	J. J. Astor, Trinity Church
	$100,000,000	C. Vanderbilt, W. K. Vanderbilt, Jay Gould, Leland Stanford, J. D. Rockefeller
	$70,000,000	Estate of A. Packer
	$60,000,000	John I. Blair, Estate of Charles Crocker
	$50,000,000	Wm. Astor, W. W. Astor, Russell Sage, E. A. Stevens, Estates of Moses Taylor, Brown & Ives
	$40,000,000	P. D. Armour, F. L. Ames, Wm. Rockefeller, H. M. Flagler, Powers & Weightman, Estate of P. Goelet
	$35,000,000	C. P. Huntington, D. O. Mills, Estates of T. A. Scott, J. W. Garrett
	$30,000,000	G. B. Roberts, Charles Pratt, Ross Winans, E. B. Coxe, Claus Spreckels, A. Belmont, R. J. Livingston, Fred. Weyerhauser, Mrs. Mark Hopkins, Mrs. Hetty Green, Estates of S. V. Harkness, R. W. Coleman, I. M. Singer
	$25,000,000	A. J. Drexel, J. S. Morgan, J. P. Morgan, Marshall Field, David Dows, J. G. Fair, E. T. Gerry, Estates of Gov. Fairbanks, A. T. Stewart, A. Schermerhorn
	$22,500,000	O. H. Payne, Estates of F. A. Drexel, I. V. Williamon, W. F. Weld
	$20,000,000	F. W. Vanderbilt, Theo. Havermeyer, H. O. Havermeyer, W. G. Warden, W. P. Thompson, Mrs. Schenley, J. B. Haggin, H. A. Hutchins, Estates of W. Sloane, E. S. Higgins, C. Tower, Wm. Thaw, Dr. Hostetter, Wm. Sharon, Peter Donohue

Trinity Church is included in this list because it is practically an individual owner.  For the purpose of estimating the distribution of wealth, it is obvious that this corporation, which has no stockholders, must be treated as a unit.

So which side is the church on?  Which side is the Church on?  The side of the poor, or the side of the wealthy? 

How do we judge it?  By its words, or by its actions?  The Episcopal Church, in some places, is known as the Frozen Chosen.  In many places, it is a very welcoming community, but with some exceptions, it does not seek to find the structures that create poverty, or to challenge them when faced with them.  It is good at charity, but not as good at justice.  It asks prayers for seekers after justice, but doesn't otherwise encourage them.

"Faith, hope and charity ... but the greatest of these is ... justice!"

The General Convention of the Episcopal Church (then known as the Ninth Church Congress), in 1884, heard an address by Henry George, entitled Is Our Civilization Just to Working Men?

The founder of the (Episcopal) Order of the Holy Cross, the Rev. James Otis Sargent Huntington (1854-1935), was very active in the Anti-Poverty Society in NYC.  See James Kiefer's article on the Rev. James Otis Sargent Huntington, which gives a fine account of what Henry George's ideas are about.

I guess I don't expect too much of Trinity Church, a/k/a The Republican Party at Prayer.  They know where their bread is buttered, and aren't going to have a lot of interest in the folks who rely on margarine.  But I hope their theology works for them; it doesn't work for American society.  But that's what freedom of religion is about: give them tax exemptions to spread whatever they call their theology!

PostScript: I'm led to wonder about how there can be vacant land in lower Manhattan, and second, what sort of harm it would do to its owners to permit someone to put it to use for a while.  I'm sure the church isn't paying property taxes on that vacant land.  Why should that be?  And for whose benefit is it being kept vacant?

Pointers on the Single Tax

POINTERS ON THE SINGLE TAX.

The San Jose Letter, February 15, 1896

A landless man is an unfreeman. — Saxon Proverb.

He who has no clear, inherent right to live somewhere has no right to live at all. — Horace Greeley.

The land of every country is the common property of the people of that country. — Bishop McNulty.

The greatest discovery of my life is that the men who do the work never get rich. — Andrew Carnegie.

Let the great landlords beware; if once they believe that they have no need of the people, the people may in their turn think they have no need of them. — Sismondi.

All the sufferings, against which civilized nations have to struggle, may be referred to the exclusive right of property in the soil, as their source. — Professor Zachraie.

Bodies of men, land, water, and air, are the principle of those things which are not, and which it is criminal to consider as, personal or exchangeable property. — John Ruskin.

The foreign goods that compete with the goods of our manufacturers and trusts are heavily taxed at the Custom House, but foreign laborers are admited free of duty. — Hon. Tom L. Johnson.

The widow is gathering nettles for her children's dinner;'a perfumed Seigneur, delicately lounging in the Oeil de Boeuf hath an alchemy whereby he will extract from her every third nettle—and call it rent. — Carlyle.

The English landlord system, so far from having any moral basis, is founded upon a supercilious contempt of the only moral principal that can afford any justification for private property in land. — Professor A. W. Hunter, M. A., L. L. B.

Under the feudal system the proprietor was the Crown, as representing the nation; while the subordinate tenures were held with duties attached to them and were liable, upon nonfulfilment, to forfeiture. — J. A. Froude.

Those who make private property of the gift of God (land) pretend in vain to be innocent. For in thus retaining the substance of the poor they are the murderers of those who die every day for the want of it. — St. Gregory the Great.

I should myself deny that the mineral treasures under the soil of a country belong to a handful of surface proprietors in the sense that this gentleman appeared to think they did (i. e., to do with as he pleased). — Lord Coleridge.

While the tax on the land values promotes industry and therefore increases private wealth, taxes upon industry act like a fine or a punishment inflicted upon industry; they impede and restrain and finally strangle it. — Dr. McGlynn.

Every permanent improvement of the soil, every railway and road, every bettering of the general condition of society, every facility given for production, every stimulus applied to consumption, raises rent. The land owner sleeps, but thrives. — Thorold Rogers.

This bull, the very type of massive strength, who, because he has not wit enough to see how he might be free, suffers want in sight of plenty, and is helplessly preyed upon by weaker creatures, seems to me no fit emblem of the working classes. — Henry George.

Equity, therefore, does not permit property in land. For if one portion of the earth's surface may justly become the possession of an individual, and may be held for him for his sole use and benefit, as a thing for which he has an exclusive right, then other portions of the earth's surface may be so held; and eventually the whole of the earth's surface may be so held; and our planet may thus lapse altogether into private hands. — Herbert Spencer.

We permit absolute possession of the soil of our country with no legal rights of existence on the soil to the vast majority who do not possess it. A great landholder may legally convert his whole property into a forest or hunting ground, and expel every human being who has hitherto lived upon it.  In a thickly populated country like England, where almost every acre has its owner and occupier, this is a power of legally destroying his fellow creatures; and that such a power should exist, and be exercised by individuals, in however small a degree, indicates that as regards true social science, we are still in a state of barbarism. — Alfred Russell Wallace.

Franklin Hichborn: The Single Tax -- with a good graphic

I came across this in the San Jose Letter, from late 1895.   Over the course of the year of issues online (about 430 pages), there were just a few articles specifically about the Single Tax.  But I continue to be amazed at how much of the popular literature of the 1890-1920 period has as its context the assumption that the reader knew of and was generally comfortable with the ideas of Henry George.  They were in the air people breathed, well-known to all!  What I find interesting, as a long-ago American Studies major, is that a 21st century reader who isn't familiar with George's ideas, reading that literature, would miss out on most of the conversation -- and perhaps never notice the gap!

The graphic [woodcut, or "cut"] is definitely a keeper.  It explains a lot of things.  Location, location, location. This political cartoon covers it pretty well.  (See also a recent video here.)  While it isn't signed, it makes me think of J. W. Bengough's cartoons, which appeared in The Single Tax Review for a number of years in the first decade of the 20th century.  Bengough was also the author of the wonderful Up-to-Date Primer: A First Book of Lessons for Little Political Economists.

I'm assuming that Franklin Hichborn, editor of The San Jose Letter, wrote this piece, inspired in part by the woodcut in the SF Star.  The comparison of the 4 lots might be compared to Louis F. Post's lecture notes, at http://wealthandwant.com/docs/Post_Lectures.htm, starting at Chart 28.

The island analogy is prominent at http://www.wealthandwant.com/.  Check out "Robinson Crusoe" and "new country" in the "themes."

 

THE SINGLE TAX.

Through the courtesy of James H. Barry, publisher of the San Francisco Star, we are enabled to publish the cut accompanying this article, which gives, as the Star expresses it, the "Single Tax in a nut shell." In the near future a series of articles on Single Tax will be published in the Letter, which, besides stating clearly what the Single Tax is, will give, which will be more important, what the Single Tax is not. The confusion among the people on this very simple subject, is due in the main, I fancy, to their misunderstanding of the term rent. It is proposed to show what rent is, and, by it, what is meant by the Single Tax.

Any old farmer knows, and common sense will tell the inexperienced, that in a 10 acre field, more grain can be raised by planting a bushel of seed than a quart, more by plowing the land and harrowing, than by omitting the plowing, more by having the field fenced than by allowing cattle to run over it. In a word it pays to expend a certain amount of labor and capital upon our 10 acres. But it will be just as readily recognized that the thing can be over done, that the field can be plowed so much that the last plowing does not pay, that more seed can be sown that will be justified by the returns. There is, than a point in the culivation of our field where a given amount of seed and a given amount of plowing will yield the best returns, a point beyond which it will not pay the farmer to go, where the return will begin to be deminished in proportion to the outlay. In a word, a point of deminishing returns.

Now, suppose a community to be living on an island which has no communications with the outer world. Suppose the food of the community to be, in the final count, wheat, and suppose our island to have four grades of land, one producing at the point of diminishing returns 30 bushels to the acre, one 28, one 26 and one 24.  Here is our land:

30 bushels to the acre	28 bushels to the acre
26 bushels to the acre	24 bushels to the acre

So long as the 30-bushel land will supply the wants of the people there will be no rent on our island.  If the 30 bushel tract is owned by ten people they will compete with each other for tenants until practically nothing is paid for the use of the land. 

But when the population of our island increases to such an extent, (and by the way, it is bound to increase so long as there is free land) that the 30 bushel land will not supply the wants of the inhabitants, the 28 bushel land must be cultivated. The 30 bushel land is then in demand, for those cultivating it will, with the same outlay of labor and capital, get 2 bushels to the acre more than the 28 bushel land, and the ten owners may and will charge all they can get for its use. This will be two bushels of wheat a year or the difference between the yield of the two tracts. These two bushels will be rent.

When the combined 30 and 28-bushel tracts fail, owing to the steadily increasing population, to supply the island with wheat, the 26-bushel land must be cultivated. The owners of the 30-bushel tract will be able to get 4 bushels a year rent, the owners of the 28-bushel tract 2 bushels. When increasing population brings the 24-bushel tract into cultivation, 6, 4, 2 bushels will be charged, plus the amount which the necessities of the people, enable the owners of the 24-bushel land to charge them.

This, then, is the way rent originates. Dr. Walker defines it: The remuneration received by the land-owning class for the use of the native and indestructible powers of the soil, or, as it might be expressed, for the use of natural agents.

Our wheat producing island presents the doctrine of rent in its simplest possible form. "Land and natural agents" includes the arable, pasture and timber lands, mineral deposits, water privileges and building sites. When one piece of land becomes valuably [sic] for any reason, to a community, the person enjoying its advantages can give, and still be able to compete with his neighbor occupying land less favorable situated, the difference between the productiveness of the two tracts — rent. Who should receive this difference? Our present system says individual land-lords. Henry George says the people. He would collect this rent from land holders. This would be sufficient to meet all the requirements of national, state and municipal governments. It would be a single tax.

We have scarcely room to state them here, but briefly a few of the things the single tax is not: It is NOT a tax on acreage. It is a tax on land values. If farmer "A" has a 100-acre farm valued at $10,000, it means that the difference between the productiveness of that farm and an equal amount of no-rent land is, at our present rates of interest about $800. If city land—lord "B" has a 25-foot lot valued at $100,000 it means that lot is worth to the community, from its situation or for other causes, $8,000 a year more than the non-utilized land.  The ''single tax" on the 100 acres would be then $800 and on the 25-foot lot $8,000 a year. Farmers do not seem to be able to grasp this. In New Zealand the people are blessed with a land system resembling very much the single tax: and yet, the very term, single tax, frightens the farmer of that progressive island as badly as it does the prune-growers of our own Santa Clara valley.

Rent is NOT interest, insurance, taxes as they are, or water-rates, although they are all paid by the honest plodders of the community under the name, rent. Did it ever occur to you, my honest friend, that the landlord, before whom you doff your greasy cap so humbly, and who boasts that his taxes are so much while yours are nothing, never paid a tax-bill on rented property in his life. You pay it for him. He is your agent. He figures out your rent thus:

"The land is worth so much, interest on that (this is rent) the building so much interest on that (this is interest) insurance, so much, water-rate so much, taxes so much. I can allow tenant to have the place for the sum of these."

Thus you pay the rent, interest, insurance, water rates, taxes, under the generality "rent." The landlord pays nothing in the shape of water rates, insurance or taxes. He collects interest on the money invested in the buildings, which we will not pass upon. He collects the economic rent of the land and appropriates it to his own use, which is robbery.

One word on the difference between real and personal property, and we will leave you, my honest friend, to accumulate your landlord's taxes for next year. I paid five cents for the pen-holder with which I am writing this. The man I got it from gave me title to it, which he had purchased from some one else. This some one else, in his turn had acquired title by purchase, and if we follow the title back far enough, we will find the man who first owned the pen-holder, who did not purchase it,— made it. The original title, then, to this pen-holder, rests in human labor. It is so with every piece of personal property: this paper, ink, desk, house — the title to them all is the same — human labor. And, many reforming unmentionables to the contrary, every man is entitled to the results of his own exertions.

But how about the land upon which this building is situated? A. owns it. Where did "A" get his title? From "B." Tracing this title back, shall we find it resting on human labor? Not at all. No one made this land. Some one took it; gave title to some one else, and that title stands. It rests in force, fraud or nothing.

To sum it up: Notice that the blessing of rent did not come to our wheat-producing island until the increasing population, the people, made the land valuable. The million-dollar blocks in San Francisco would not be worth $1,000,000 if the people who have built up the city had not made them so. Now, since there can be no private title acquired to land that will stand the test of reason, since the very rent is due to the people themselves, and arises from and increases with population, we say that the people are entitled to this rent. Can you give one reason why individual proprietors should take it? Can you give one valid reason why people should pay it to them? If you cannot, you must admit that the economic rent of a nation, the unearned increment of land, belongs to the people. As this rent would more than pay the taxes of the nation, no other tax would be necessary. Thus you believe in the wisdom of the single tax. What are you going to do to secure it?

Cut the accompanying picture out; hang it up where you can conveniently see it, and consult it every time that, after stretching and pinching, and starving yourself and family, you have failed to make both ends meet.

F. H.

Things to Tax

Paul Krugman's column in the NYT Sunday was entitled "Things to Tax," and I thought it was a bit broad-brush. 

Krugman wrote,

"Let me suggest two areas in which it would make a lot of sense to raise taxes in earnest, not just return them to pre-Bush levels: taxes on very high incomes and taxes on financial transactions."  

I don't disagree with either of those as a starting point, but neither goes to the root of the problem, which I believe to be the sorts of privileges we have given out, or somebody's ancestors put in place and we've not even thought about questioning.  They are so familiar to us that we don't question them any more than we think about breathing.  So (switching metaphors) we find ourselves barking loudly up the wrong tree -- while the critters in the other trees are smiling broadly!

The best answers I know to which tree we ought to be barking up come from the writings of Henry George.  Several speeches were what I was first inspired by:

• Thou Shalt Not Steal!
• The Crime of Poverty
• Thy Kingdom Come!
• Moses

Whether or not your own orientation is theological, I think you might appreciate these. 

We ought not to be taxing indiscriminately.  What we tax matters greatly.  Some provide Natural Public Revenue -- and we ought to socialize that revenue -- and other possible objects of taxation ought not to be taxed at all -- privatize them!

Here's the comment I posted to Krugman's column:

Which rich should we tax?

• Should we tax the ones who have bought or inherited or otherwise acquired our very choicest land -- that in our biggest cities, well-served by taxpayer-provided infrastructure and services?
• Should we tax the ones who, in effect, own our most valuable natural resources, or have access to resources we send our military to protect on our behalf?
• Should we tax those who benefit from monopolies of various kinds, such as owning our water companies, our electric utilities, our cable-tv companies, or monopolies of their own creation?
• Should we tax those who benefit from privileges of various kinds, such as the possession of our airwaves, landing/takeoff rights at busy constrained airports (think LGA at rush hour)?
• Should we tax those who benefit by taking some fraction of every financial transaction, even if that transaction doesn't create additional value for the economy as a whole?
• Should we tax those who benefit from the activity or inactivity of the FIRE sector, which Joe Stigitz says is creaming 40% of the profits made by the productive sectors of the economy?
• Or should we just tax all the high-income people, without going to the root of the privileges which produce undeserved wealth for some at the expense of the rest of us.

The answers to these questions matter.

Go to the root. Understand what is privilege, and what is an actual contribution to the economy. Understand what is someone's free lunch, paid for by the labor of others. Understand who reaps what they haven't sown. Correct these things.

An old idea. Look up Henry George's writings from the late 19th century, which kicked off the Progressive movement and still inspire many of us.

Short term, maybe, changing the income tax brackets is appropriate. But it doesn't get at the root of the problem.

Be radical. Go to the root.

For more information, see http://lvtfan.typepad.com/ or http://www.wealthandwant.com/, or look up Henry George's ideas.

As an afterthought, I'll add that you might want to check out Mason Gaffney's website, at http://www.masongaffney.org/; Fred Foldvary's writings, including "The Ultimate Tax Reform," and Walt Rybeck's book, "Re-Solving the Economic Puzzle."

Lucy and the Football

Watching CSPAN's Washington Journal this morning, my mind conjured up an image of a cartoon of the 1% saying to the rest of society something along the line of "give us what we want to grow the economy, and this time you-all will get 95% of the growth and we'll only take 5% for our cut of it."  All I could picture was Lucy holding the football for Charlie Brown to kick it.

Recall that the Congressional Budget Office recently issued a report showing that while average household income (after taxes and transfers) grew by 62% from 1979 to 2007,

• the income of the lowest income 20% of us grew by 18%;
• the income for the middle 60% of us grew by almost 40%;
• the income for the next 19% of us grew by 65%; and
• the income for the top 1% of us grew by 275%.

In other words, over 80% -- probably close to 90% -- of us experienced below-average growth.

To quote directly from the study:

• The share of income received by the top 1% grew from about 8% in 1979 to over 17% in 2007.
• The share received by other households in the highest income quintile was fairly flat over the same period, edging up from 35% to 36%.
• In contrast, the share of after-tax income received by the 60% of the population in the three middle-income quintiles fell by 7 percentage points between 1979 and 2007, from 50% to 43% of total after-tax household income, and
• the share of after-tax income accruing to the lowest-income quintile decreased from 7% to 5%.
• By 2005, the share of total after-tax household income received by the 20% of the population with the highest income had exceeded the share received by the remaining 80%.  In 2007, those shares were 53% and 47%, respectively.
• In 1979, the top 1% received about the same share of income as the lowest income quintile; by 2007, the top percentile received more than the lowest two income quintiles combined.

So what changes do we need to make in our structures so that the next 29 years don't continue the trend of the 29 years shown here?  Readers of this blog will know that I regard the ideas of Henry George as our best textbook for correcting the situation.  Check out "Social Problems" and "Progress and Poverty," from the links at http://www.wealthandwant.com./

Progress: Sharing the Earth So All May Prosper - September-November issue

The newest issue of Progress, an Australian Georgist publication, is online here.  The motto is "Sharing the Earth So All May Prosper."

There is a lot of good material, and I'll share some of the things that caught my eye.

• An article about a film entitled "Real Estate 4 Ransom" which I commend to your attention, wherever you live. (I'll keep you posted on the film itself.)
• “Economist James Galbraith has noted that only 12 out of 15,000 economists in the US noticed the US$8 trillion dollar housing bubble” (page 6)
• We propose a change in the tax mix so that future infrastructure pays for itself by expanding the tax base without increasing the tax burden. (page 9)
• Infrastructure adds enormous value to land in prime locations according to proximity and serviceability.
  Land Value Capture (LVC) is a simple technique to recycle the publicly funded windfall gains that accrue to land owners. Importantly, these windfalls are captured over the life-cycle of the infrastructure, such that one generation is not hit with the total infrastructure costs (ie as per the current preference for Developer charges). (page 10)
• Windfall gains from infrastructure add up to several times the cost of the infrastructure to surrounding properties. We propose that a sufficient contribution from this windfall be recycled back to the government so that other infrastructure projects can be funded without substantially burdening one generation over another.
  At present land speculators baulk at paying barely 10% of the land bounty (windfall gain) back to the community via government’s Land Tax, Council Rates, Stamp Duties and Capital Gains. (Page 11)
• “Henry George did more than draw ‘the deadly parallel of riches and misery.’ He recast the science of political economy by working out the natural laws of the distribution of wealth. He destroyed the current academic theory of wages and capital. He amplified and extended Ricardo's law of rent. He dug to the root of the wealth distribution.” (John Dewey, quoted on page 22)
• If you could choose the sort of society that you were to be born into, would you choose one in which the distribution of wealth is guaranteed to be equal? (page 28 -- and don't miss the illustration cartoon on "trickle-down economics"!!)
• The world faces a series of worsening crises, climate instability, rising energy costs, economic apartheid, and erosion of democratic institutions.
  What is required is not a set of technical instruments that try to resolve  these, one at a time. We need a new social philosophy that addresses all these crises simultaneously. (page 38)
• All 17th century authors took it for granted that God had given the earth to
  all people in common, not just to those who had claimed title to a part of it. Starting with that premise, the difficulty lay in justifying private ownership of nature. They saw that private property in land or ocean or other gifts of nature was an obvious usurpation of the rights of the rest of humanity. Private ownership was deemed a necessary evil to achieve more productive use of nature, but it was clearly an evil, never an institution that was good in itself. (page 39)
• The idea of charging a fee for the use of nature and sharing the revenue equally might seem like a proposal that would not be threatening to powerful interests, but it is. The wealthy at present take a disproportionate share of the common stock of resources, both renewable and non-renewable, and they aim to keep it that way. (page 40)
• “Ironically, what comes closest to being sacred in modern societies are individual rights, private property, and personal freedom.” (page 41)
• “It seems that most people are concerned only with the future of their own children, not with the next generation as a whole.” (page 43)

A lot of good material -- and I've barely mentioned the graphics!

Who are the Criminals? --Henry George, Jr., 1901

I am including this because I find it timely and timeless; because it provides a good simple mathematical look at the perversity of our current tax system, and because it illustrates my notion that when Leona Helmsley said "WE don't pay taxes; the little people pay taxes," she was not describing tax evasion but actual tax structures.

Henry George, Jr., was a U. S. Congressman.  His most famous writing is "The Menace of Privilege." 

WHO ARE THE CRIMINALS?

BY HENRY GEORGE , JR.
Copyright, 1901, by The Abbey Press, 114 Fifth Avenue, New York

I.    Who are the Criminals? 5
II.   French Aristocracy of Privilege 6
III.  New York Aristocracy of Privilege 10
IV.  Robbery of Masses by Classes 12
V.   Nature and Extent of Robberies 13
VI.  How to Stop the Robberies 18
VII. The Criminals 23

I.    WHO ARE THE CRIMINALS?

In considering the problem of how to check or control vice and crime in New York the question at once raised is: Who are the criminals? Who are they who cause these dreadful evils in the community? For unless we know exactly where the disease lies how can we attempt a remedy?

II. FRENCH ARISTOCRACY OF PRIVILEGE.

When the French Revolution broke loose the people followed the lead of men who seemed no better than a pack of devils, for they maimed, they brutally tortured and they slew. Women, whose only offense was that they were members of an arrogant and grinding aristocracy, were stripped naked, treated with every indignity and killed with every mark of ferocity. Old men and young children belonging to the upper classes were butchered, and persons of blameless life and humane intention were trampled under foot when they attempted to stay the carnival of blood.

Who will dare say that these revolutionary leaders, these butchers, were not criminals — criminals whose bloody hands must shine down through history? They were men turned to monsters; brutes with human intelligence, striving for new ways to torture and kill.

But whence came they? Not from without. They sprang up within. They represented the spirit of retaliation — of fiendish retaliation for the centuries of wrong done them and theirs. They were the progeny of poverty made by robbery.  Their deeds were the deeds of monstrous criminals, but they themselves were the spawn of hideous injustice — an injustice that gave to the few riotous feasting and gorgeous raiment and to the many rags and black bread filled with maggots.

The aristocrats during centuries of power had appropriated the soil of France, and all other Frenchmen had to purchase the privilege of living in their native country.  Not content with this, the upper classes had thrown upon the masses all those heavy taxes which it was the plain intent only the landowners should bear. They shifted upon the common people all the expenses of an extravagant, aristocratic government, and through ground rents sucked away all the people's remaining substance, save just enough to keep them alive and at work. Who were making the masses so poor and wretched was as plain as day. The masses themselves could see, and when they raised the sword against the aristocracy all hell seemed to break loose.

Who were the criminals? Why, of course they were criminals — horrible, revolting criminals — who did this guillotining, who committed these butcheries.

But who made these criminals? Clearly those who bore so heavily upon the people — the aristocrats, who kept the people in fearful poverty and ignorance which bred the spirit of bloodthirsty tigers.

The aristocracy, therefore, were the primary, the real criminals.


III. NEW YORK ARISTOCRACY OF PRIVILEGE.

I wish to proceed with greatest caution, with utmost conservatism. Yet candor compels me to ask: Have we not in our community an aristocracy of privilege — an aristocracy far more rich, far more powerful than was the aristocracy of old France? And have we not a corresponding poor class? Is it not true that half the population of Manhattan Island is living in what Ex-Mayor Hewitt rightly calls "those terrible tenements?"

That Prince of the Church, Bishop Potter, has proposed in the emergency that we have noonday prayer meetings. By all means, we all say. Let us bow ourselves before Almighty God and ask for relief from this social scourge. Yet what if, while we pray, we abate not the power of our aristocracy of privilege; what if we do nothing to mitigate the poverty of the million tenement dwellers?

The distinguished divine has also proposed a military police. If that were good, would not a local standing army be better? It would keep order, at least for a time. But would it cure the general poverty among the masses? Would it not rather act like a lid fastened down on a volcano — work well, until fire and molten stone and destruction belched forth? What then?


IV. ROBBERY OF MASSES BY CLASSES.

Assuming that we are sincerely trying to make civic conditions better, that we are seeking a cure (if there be a cure) for the general vice and crime in the community, should we not ask ourselves some plain questions? Is it not the truth that we have an aristocracy? Is it not the truth that we have a poor class? Is it not certain that the rich are growing richer and the poor poorer and more numerous?

I believe that there can be but one answer — yes.

Yet I can see no reason for this state of things unless it be that the classes are robbing the masses.


V. NATURE AND EXTENT OF ROBBERIES.

LET us consider how the classes may be robbing the masses into poverty.

It is said that when the first Dutchmen came sailing into New York Bay they bought Manhattan Island for $24. That was for the land alone, no houses or other improvements being here. Today the selling value of the bare land of this same Manhattan Island is at least $3,000,000,000. Those who possess the land of this island, now get what is equivalent to a ground rental of $150,000,000 a year, with this sum steadily swelling. The ground rental of Greater New York cannot be less than $225,000,000 yearly.

This vast sum is paid over to the landlord aristocracy — for what? For doing nothing. The people multiplied from a ship's crew to several millions in and about the island and behold! the vast value of land which in the beginning sold for but $24. The increment of value obviously has not been produced by individuals; it is entirely aside from and in addition to the value of improvements, which spring from human labor, which are produced by individuals. This increase in land value is a publicly-made value. It of right belongs to all the people. Do all the people get it? No, the few whom we recognize as the owners of this land claim that value and get it. The people at large in the community get nothing. Do not these landed aristocrats — of which the old French nobility were in many respects prototypes — rob the community? Do they not go far toward robbing a large part of the people into poverty?

Take another instance of robbery of the many by the few. Observe what we are doing about public franchises. A public franchise is a public right of way, a public highway. Modern civilization, with its intense centralization, its condensed population, and its interdependence of individuals, makes these highways of vital importance to the community. They are the arteries of the body-social, the channels of intercommunication and transportation, of heat, and water, and light, and power, and sewage. Were they suddenly destroyed, a large part of the population would die as quickly as a member of the human organism withers up and dies when the flow of blood is cut off from it.

Then if these public franchises, these public rights of way, these public highways, are so vital to the body-social, so necessary to the well-being of the people, what should be our policy toward them?  What is our policy toward them? Why, in the case of water and sewage we treat them as public property, operating them publicly through public officials. But what do we do in respect to the other franchises? What do we do regarding street railroads, telephones and telegraphs, electric lighting and heating and gas, and steam supply? All these public franchises are treated as if they were private franchises. Upon all these public highways we allow private individuals to set the claim of ownership; to make charge upon the people; make charge upon the body-social for its blood, as it were. And a conservative estimate of the annual value of these public franchises in Greater New York at this time is $30,000,000.

Here, then, we have two forms of grand, constant, continuous robbery of the people — an aristocracy of privilege appropriating public ground rents and public franchise values, so that a few of the population are enabled to live in palaces while a million crowd into tenements.


VI.   HOW TO STOP THE ROBBERIES.

Now the masses of the people of Greater New York lose annually by the appropriations of the landed and franchise aristocracy —

In ground rents	$225,000,000
In franchise values	30,000,000
While they are compelled to pay in various taxes for the support of local government	98,000,000
Which makes in all	$353,000,000

What shorter way is there to relieve poverty and to do social justice than to abolish the $98,000,000 of general taxes, which fall mainly upon industry or the fruits of industry and terribly hamper the masses of the people; and then what more simple than to appropriate for local governmental expenses that sum out of the $225,000,000 of publicly-made land values?  Why not further lighten the load of the masses by taking over into public ownership and management all public municipal franchises, just as are water and sewage now; and then why not cut down their cost of service to the public that $30,000,000 which now represents purely franchise value in the charges of the private corporations that possess and manage them?

For a third step, why not make these municipal utilities free to the public, meeting the expense of their operation by another appropriation of the publicly-made land values?

And for a fourth step, why not appropriate for an old-age pension to every citizen, rich and poor alike, for public parks, for public lectures and concerts, or for any other or for all such purposes — all that still remains of the publicly-made land values?

What would be the result of such a policy? It would be that all the people in Greater New York would be relieved of the burden of $98,000,000 of various taxes; that the great charge of the many branches of the public franchise service on the people would be entirely wiped out and abolished; and that the whole of land values, that is, of ground rents, would be enjoyed by all the people equally, being appropriated for public uses.

Would this make any difference in the community? The welkin is made to ring by the most influential of the tax-payers when, under present conditions, the taxation authorities raise or lower the tax rate even 1%. What, then, would happen if all taxation were lifted from the fruits of toil, if public utilities were made free, and if land values were to benefit, not a class, but the whole people?

Such a tax would be just, because it would fall on this publicly-made value; it would be certain, because land cannot be hidden or lessened in amount; it would force all unused or inadequately used valuable land into its highest use, for no one could afford to hold such land vacant for a speculation, as very many do now.

Land in Greater New York would therefore be cheaper — how much cheaper may be judged by the fact that two-thirds of the land within the city limits, though extremely valuable, is not now used.  This unused land would compete with the used land for users, so that land values in the community generally would fall. At the same time all building materials, being relieved of present taxation, would be far cheaper, making two of the chief elements for house building would be greatly less in cost, and consequently, larger, lighter, better dwelling accommodations in every way could and would be supplied to the masses of the people, and especially to the million now living in tenements.

What would help the poorest would be of direct and indirect benefit to all others in the community; and this would be but one of a large harvest of good results that the people would reap from such a policy.

The privileged classes, the aristocrats, would lose their privileges, but they would have no less rights than any and all other citizens of Greater New York.


VII.   THE CRIMINALS.

That able and public-spirited citizen, Mr. President Baldwin, of the Long Island Railroad, and Chairman of the Chamber of Commerce Anti-Vice Committee of Fifteen, has said that this is not the time for "idealist scheme of reform." But we are trying to put down vice and crime in the community; and the question is: Who are the criminals?

Let us be frank with ourselves: Who are the criminals? Are they the housebreakers, the unfortunate women who walk the streets and the police officials who take blood-money? Or are they those who rob the masses of the people into poverty — deep, biting, degrading poverty?

Are not the aristocrats of privilege, knowingly or unknowingly, the criminals we should first consider in an examination of civic disease in New York?

LVT vs 90-9-9

from the LA Times:

How not to change the tax code [Most commented]

October 17, 2011 

How hot is former Godfather's Pizza magnate Herman Cain? For the second day in a row, the new front-runner for the GOP presidential nomination dominated the "most commented" category here at The Times' Opinion Manufacturing Division. More than 100 readers weighed in on Sunday's editorial about Cain's "9-9-9" tax plan, even more than had posted comments about Friday's piece on Cain's views regarding racism.

The Times' editorial board praised Cain for coming up with a plan that would radically simplify the tax code. But it complained that the proposal would shift the tax burden from the wealthy to the middle and lower classes:

The current system gradually increases the tax rate on individuals and businesses the more they earn. Moving to Cain's formula would effectively dun those least able to pay in order to spare those at the other end of the economic ladder, in the hope that the tax cuts for high earners would translate into more jobs, faster growth and higher wages. We tried a less extreme version of that approach in President George W. Bush's first term, and the rising tide that resulted lifted only the yachts.

Commenters were roughly evenly divided between supporters and critics of Cain's plan. What follows is a sampling, edited only to correct the occasional spelling error.

 

 You can read the sampling at the link at the beginning of this post; here's the comment that caught my eye:

We need another alternative

A better idea for tax reform: The Land Value Tax first proposed by 18th century economist Henry George. No sales or income tax, only a tax on the value of land.

Simple to define and enforce: You can try to hide income, but you can't hide land.

Progressive AND pro-growth:  The wealthy own most of the expensive land and would pay most of the taxes, but the marginal tax on both income and consumption would be ZERO - a win-win for liberals and conservatives.

Henry George believed that what you earn from your labor, business or profession is 100% yours, but the value of your land depends on the value of your community and is therefore fair game to be taxed to support that community.

The Land Value Tax sends the message that you make money by creating useful products and services, not by wheeling and dealing in real estate.

--singerfb

Wealth Concentration data

I got into a chance conversation with a friend a couple of weeks ago about wealth concentration, and he made an assertion that appalled me: that 400 families hold 50% of America's wealth.  I told him that I knew wealth concentration was a serious problem, but that I was sure it wasn't that concentrated!   He brought out his cell phone and googled these words: 400 families control 50% wealth, and got results.  We were at lunch with a group, so I didn't pursue it then.

I returned to the topic and did some research (without recalling exactly what his search criteria had been).    What I came up with were the following: 

1. A page from Michael Moore's website, entitled "The Forbes 400 vs. Everybody Else" (March 7, 2011), which begins, "According to the most recent information, the Forbes 400 now have a greater net worth than the bottom 50% of U.S. households combined."  He provides sources for his assertions, and they all look quite sound to me, with the possible exception of his note 3, which includes nonprofits.
2. A Politifact page which fact-checks Moore's statement and finds it true (and doesn't seem bothered by the nonprofits issue).   

This is a very different assertion from saying that 400 families hold 50% of America's wealth.  That sent me looking for the correct data for my friend.

• If you've spent much time on this site, you've probably looked at the series of 3 articles listed at left on Concentration of Wealth.  Part 1 provides these data, from the 2007 Survey of Consumer Finances (Federal Reserve Board "Ponds and Streams"):

Top 1%          33.8%
Next 4%        26.6%  [Cumulative: 60.4%]
Next 5%        11.1%  [Cume: 71.5%]
Next 40%      26.0%  [Cume: 97.5%]
Bottom 50%   2.5%

• The 2007 SCF study writeup says that the Forbes 400 are expressly and purposely omitted from the SCF, and suggests that they account for 1% of Net Worth.  So add that to the numberator and the denominator.
• More recently, I learned about a series of 3 articles Citigroup published in 2005 and 2006 in a newsletter called "Equity Strategy" which dealt with how investors might profit from "plutonomy"; "rich" here pertains not to net worth but to income:

"In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie. ...   As Figure 1 shows the top 1% of households in the U.S., (about 1 million households) accounted for about 20% of overall U.S. income in 2000, slightly smaller than the share of income of the bottom 60% of households put together. That’s about 1 million households compared with 60 million households, both with similar slices of the income pie! Clearly, the analysis of the top 1% of U.S. households is paramount. The usual analysis of the “average” U.S. consumer is flawed from the start. To continue with the U.S., the top 1% of households also account for 33% of net worth, greater than the bottom 90% of households put together. It gets better (or worse, depending on your political stripe) - the top 1% of households account for 40% of financial net worth, more than the bottom 95% of households put together. This is data for 2000, from the Survey of Consumer Finances (and adjusted by academic Edward Wolff)." - October16, 2005

One of the other articles in the series also provided a much higher estimate for the net worth of the Forbes 400 than the 1% I'd been carrying in my head: 2.4%

The Factcheck article provided, for September 2010, the Forbes 400 Net Worth of $1.37 trillion and the total US Net worth of $54.9 trillion, which makes the Forbes 400's share 2.5%.    If we apply that 2010 percentage to the 2007 SCF data, we get this:

Top 1%          (33.8 + 2.5) / 102.5 = 35.4%
Next 4%        26.6 / 102.5 =             26.0%   [Cumulative: 61.4%]
Next 5%        11.1 /102.5 =              10.8%   [Cume:          72.2%]
Next 40%      26.0 / 102.5 =             25.4%   [Cume:          97.6%]
Bottom 50%  2.5 / 102.5 =                 2.4%

Or, viewed another way:

• Top 1%             35.4%
• Next 9%           36.8%
• Bottom 90%     27.8%

It appears to me that 50% of the net worth is held by about 3.5% to 4% of us.

 Henry George wrote of a wedge being driven through society, driving a relative few upwards, and the rest downwards.

Thomas Shearman wrote, in 1889, as follows:

Federal taxation has increased 6-fold since 1860, and the whole of this increase has been taken out of the relatively poorer classes.  At the same time, the profit which is secured to the wealthier classes by the adjustment of indirect taxation in their interest has been increased not less than 10-fold.  The wealthy classes, collectively, have made a clear profit out of the indirect effects of taxation to an amount far exceeding all that they have paid in taxes, although this profit has been absorbed by a minority of even the rich.  But, apart from this, the whole system of taxation is and has been such as to take from the rich only from 3% to 10% of their annual savings, while taking from the poor 75 to 90%.  It is true that the same system existed, in form, before the war; but, taxation being light, the amount taken from each individual was far less, and the disproportion between the rich and the poor not so great, while the profit levied from the poor by the rich was much smaller.  The amount of the burden has increased, and it has been more and more shifted over upon the poor.

It is childish to imagine that, under such circumstances, the concentration of wealth can go on less rapidly here than in Europe.  On the contrary, it has gone on far more rapidly here; and it will continue to do so, at a tremendous pace.

It is intended to confine this paper to a simple investigation of facts, without suggesting remedies; but, to avoid misapprehension, the writer wishes it to be distinctly understood that he is opposed, on principle, to all schemes for arbitrary limitations of individual wealth, whether by a graduated income tax, a heavy succession tax, or otherwise; that he is utterly opposed to communism, socialism, and anarchism; and that he is of opinion that the enormous wealth of the few in this country has been forced upon them by the votes of the very masses who have been impoverished for their benefit.  Populous vult decipi.  The farmers insist upon throwing away their inheritance; and since they are determined to heap their earnings upon somebody, it is well that the list of their chief beneficiaries should be, upon the whole, so respectable.  And, indeed, has it not been clearly explained to us that it makes no sort of difference who owns the wealth of the nation, so long as it is kept at home?

But the facts should be known, without regard to the inferences which may be drawn from them; and we are now prepared to answer the question: "Who own the United States?"

The United States of America are practically owned by less than 250,000 persons, constituting less than 1 in 60 of its adult male population.

Within 30 years, the present methods of taxation being continued, the United States of America will be substantially owned by less than 50,000 persons, constituting less than one in 500 of the adult male population.

The entire article is a few posts below this one, under the title, "The Owners of the U.S."

Forget 9-9-9. Here’s a Simple Plan: 1

The post below this one is my attempt.  Here's another, from Sunday's NYT.

By JILL LEPORE   |  Published: October 15, 2011

Jill Lepore is a professor of history at Harvard and the author of “The Whites of Their Eyes: The Tea Party’s Revolution and the Battle over American History.”

A cartoon of Henry George when he ran for mayor of New York in 1886.

Cambridge, Mass.

IN the Republican debate on Tuesday, the restaurant industry executive Herman Cain, deftly countering a quip, said his “9, 9, 9” economic plan, which calls for a 9 percent corporate tax, a 9 percent income tax and a 9 percent national sales tax, “didn’t come off a pizza box.” Asked where it did come from, he said “the American people,” but added that he also has a team of economic advisers.

“One of my experts that helped me to develop this is a gentleman by the name of Rich Lowrie out of Cleveland, Ohio,” Mr. Cain said. “He is an economist.” Mr. Lowrie, a licensed stockbroker, is a wealth management consultant for Wells Fargo.

Lately, Mr. Cain has risen in the polls, buoyed by Tea Party populism, which is curious because when the word “populism” was coined, in 1890, it meant opposition to a monopoly on wealth held by businessmen and bankers.

Henry George, the most popular American economic thinker of the 19th century, was a populist before populism had a name. His economic plan was known as the Single Tax. His plan wasn’t 9-9-9; it was just: 1.

George was born in Philadelphia in 1839. He left school at 14 to sail to India and Australia on board a ship called the Hindoo. At the time, a lot of people were writing about India as a place of jewels and romance; George was struck by its poverty.

Returning to Philadelphia, he became a printer’s apprentice. He went to New York where he saw, for the first time, “the shocking contrast between monstrous wealth and debasing want.” In 1858, he joined the crew of a ship sailing around the Cape Horn because it was the only way he could afford to get to California. In San Francisco, he edited a newspaper; it soon failed. He spent most of his life editing newspapers, and, as with every other industry in the 19th century, many of them failed. In 1865, George was reduced to begging in the streets.

The 19th century was the Age of Progress: the steam engine, the power loom, the railroad. (Awestruck wonder at progress animated that era the way the obsession with innovation animates American politics today.) George believed that the other side of progress was poverty. The railroad crossed the continent in 1869. From the West, George wrote an essay called “What the Railroad Will Bring Us.” His answer: the rich will get richer and the poor will get poorer. In a Fourth of July oration in 1877, George declared, “no nation can be freer than its most oppressed, richer than its poorest, wiser than its most ignorant.”

In 1879, George finished a draft of his most important book. “Discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor,” George wrote. He thought the solution was to abolish all taxes on labor and instead impose a single tax, on land. He sent the manuscript to New York. When no one would publish it, he set the type himself and begged publishers simply to ink his plates. The book, “Progress and Poverty,” sold three million copies.

George was neither a socialist nor a communist; he influenced Tolstoy but he disagreed with Marx. He saw himself as defending “the Republicanism of Jefferson and the Democracy of Jackson.” He had a bit of Melville in him (the sailor) and some of Thoreau (“We do not ride on the railroad,” Thoreau wrote from Walden. “It rides upon us.”) But, really, he was a Tocquevillian. Tocqueville believed that democracy in America was made possible by economic equality: people with equal estates will eventually fight for, and win, equal political rights. George agreed. But he thought that speculative, industrial capitalism was destroying democracy by making economic equality impossible. A land tax would solve all.

In 1886, George decided to run for mayor of New York. Democrats urged him not to, telling him he had no chance and would only raise hell. “You have relieved me of embarrassment,” George answered. “I do not want the responsibility and the work of the office of the Mayor of New York, but I do want to raise hell.” The Democrat, Abram Hewitt, won, but George got more votes than the Republican, Theodore Roosevelt.

In the 1880s, George campaigned for the single tax, free trade and ballot reform. The last succeeded. George is why, on Election Day, your polling place supplies you with a ballot that you mark in secret. This is known as an Australian ballot, and George brought it back from his voyage halfway around the world.

George ran for mayor of New York again in 1897 but died in his bed four days before the election. His body lay in state at Grand Central. More than 100,000 mourners came to pay their respects. The New York Times said, “Not even Lincoln had a more glorious death.” And then: he was left behind.

Even Clarence Darrow, who admired him, recanted. “The error I found in the philosophy of Henry George,” Darrow wrote, “was its cocksureness, its simplicity, and the small value that it placed on the selfish motives of men.”

The economist hadn’t accounted for greed.

Thomas G. Shearman: Henry George's 'Mistakes'

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	$20,000,000	$4,000,000,000
	400	10,000,000	4,000,000,000
	1,000	5,000,000	6,000,000,000
	2,000	2,500,000	5,000,000,000
	6,000	1,000,000	6,000,000,000
	15,000	500,000	7,500,000,000
			$31,500,000,000

* 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.	$13,500,000,000
	Farms, 45 per cent	4,500,000,000
	Mortgages on farms, 20 per cent	1,000,000,000
	Other real estate	7,500,000,000
	Furniture, etc.	1,500,000,000
		$28,000,000,000

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		£65,442,000
	Manors, tithes, fines, etc.		853,000
	Fishing and shooting rights		572,000
	Markets and tolls		607,000
			£67,474,000
	British Mixed Annual Land Values, 1884.
	Houses and lots	£127,050,000
	Canals, water-works, mines, gas, iron, etc	22,381,000
	Railways	33,050,000
		£182,481,000
	One-half of these values as land		£91,241,000
	Total land values		£158,715,000

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.

Thomas G. Shearman.

Frances Willard, anti-poverty activist

I've not yet begun to watch the Ken Burns PBS series on Prohibition, other than a few snippets I've caught at odd times.  (I look forward to watching the programs in order and in quiet.) But in the first segment, I did hear the name Frances Willard and something that made me google her name along with that of Henry George, on the chance that there was some connection.  And I did find some interesting things.

Frances Willard, whose name we associate with the Womans Christian Temperance Union, was apparently also a Single Taxer.  She saw the Single Tax as the way to end poverty, which she saw as a key cause of inebriation.

A few quotes:

"We used to say intemperance was the cause of poverty; now we have completed the circle of truth by saying poverty causes intemperance, and that the underpaid, undersheltered, wage-earning teetotaler deserves a thousand times more credit than the teetotaler who is well paid, well fed and well sheltered.

"In the slums they drink to forget; we would make life something they would gladly remember; so would you.  Our objects are the same; let us clasp hands in the unity of spirit and the bond of peace."

source: NYT, 1895-06-20

from What Frances E. Willard Said:

May God crown with success the three great movements of our time which are fast passing out of the hands of philanthropists and into those of statesmen, viz., the temperance, the woman, and the labor questions, all of which are equal fractions of that one mighty whole — the human question.

and

The labor question is our question. Prostrate and crushed under the mountains of injustice that are piled upon the poor, lies the degraded woman to whom financial independence, equal pay for equal work, has often proved the lifting lever to a rehabilitated life.

quoted in "Land and Freedom" (volume 33):

'I SEE in Henry George's proposal an effort to establish a principle which, when established, will do more to lift humanity from the slough of poverty, crime and misery than all else; and in this I recognize it as one of the greatest forces working for temperance and morality.

from Miss Willard's address to the national WCTU convention in Baltimore, 1896:

In her address to the National W. C. T. U. convention held at Baltimore last week, Miss Willard said: -- We can no longer ignore the fact that, as the Scripture saith, 'the destruction of the poor is their poverty.'  White ribbon women must be the sworn foes of monopoly, of landlordism, and every other form of class legislation.  For one, I believe that the land belongs to the people, and while the farmer's domain should not be interfered with, since he turns it to a beneficent use, a propaganda of education should have devised whereby the single tax and the issue of all money by the Government itself should become two of the central planks in the platform of the party of the future.

Speaking at another meeting Miss Willard: -- Poverty is disease; it is disintegration; it has no right to be; and when men and women wake out of sleep, and see themselves as the criminals they are, nothing in the world will be so sure of actual extermination as the cursed thing called poverty -- the cradle of crime, the father of filth, the mother of misery.  In the past we have comforted ourselves with looking upon it as the effect of wrong-doing, but have now aroused ourselves to the study of its cause.  We are determined to burn to its last infectious atom the stench of the slums, and the temptation to lead a bad life with which poverty haunts the dream of boyhood, handicaps the purposes of youth, and enthralls the life of manhood.

For myself, twenty-one years of study and observation have convinced me that poverty is a prime cause of intemperance, and that misery is the mother, and hereditary appetite the father, of the drink hallucination.

We once said that intemperance was the cause of poverty; now we have completed the circle of truth by saying poverty causes intemperance, and the underpaid, underfed, undersheltered, wage-earning teetotaler deserves a thousand times more credit than the teetotaler who is well paid, well fed, and well cared for.

Ten years ago I could not have said it honestly; five years ago I could not have said it helpfully; but now I ceaselessly declare that I believe it to be the right and duty of the white-ribbon women to help abolish poverty in the larger sense of that great phrase.

This simple change in taxation would also force land at present held out of use for speculative profit into use, and thus prevent the monopolist from becoming rich at the expense of the public.  The value which attaches to the land on which any community lives, is created by that community from year to year, not by any individual, and is thus the legitimate fund from which all public revenue should come."

from an Australian newspaper, 1898, LTE, quoting Frances Willard:

"I believe the present economic condition of the country, the misery of millions of our people, the vast number of the unemployed, call for reforms which, if they could be brought about, would vastly diminish the tendency to drink, and that one of those reforms of far-reaching and unspeakable beneficence is the single tax, as set forth by its great apostle Henry George."

and finally, from the Oxford Observer, a two-parter from July, 1897:

The Oxford Observer. PUBLISHED WEEKLY. SATURDAY JULY 17th. 1897

AN UP-TO-DATE CATECHISM.
By Miss Frances E.Willard.

Who made the earth?
God.

For whom was it made?
For the use and sustenance of all his children, each one of whom has an equal right to its enjoyment.

How do we know that each has this equal right?
Without the use of the earth no human being can exist. As each has an equal right to existence, it follows that each has an equal right to the earth.

Some persons claim to 'own' land.  Where did they get their titles to it?
All such titles in this country were derived from foreign kings or queens who claimed to own "America."

How did these foreign governments get this alleged right?
Through open violence or fraud.

Have the people of one generation any right to give away or sell that which was made for all generations?
No; the earth belongs to the living; the dead have no right therein.: (Thomas Jefferson.)

If any man claims to "own" land, has he a moral title to it?
No; and it makes no difference whether he has purchased or inherited it, his title cannot be better than his from whom he derived. it.

To whom does the land of this country belong?
To all the people of this country and to unborn generations.

It is necessary that each should have an equal portion of land in order that the rights, of all may be secured?
No; that would be impracticable and unnecessary. The same end may be accomplished by taking the rent of land for public expenses.

To be continued.

---

Oxford Observer, Volume VIII, 24 July 1897

An Up-to-Date Catechism
by Miss Frances E. Willard

As the value of land is produced by the community it should go to the community.

Can this be done without disturbing existing social institutions?
Yes; by abolishing other forms of taxation and increasing the tax on land values.

How would this system compare with our present system of taxation?
It would decrease the cost and simply the functions of Government.  A tax on land values is the ideal system of taxation. -- (New York Times)

You would, then, remove all taxation from buildins and improvements?
Yes; the more improvements we have the better for the community.  Our present system of taxation checks production; a tax on land values would stimulate production by abolishing the tax on improvements.

How would the placing of all taxation upon land values affect the farmer?
It would reduce his taxes very largely.  The farmer is the worst taxed workingman in the country; he not only pays largely through indirect taxation on everything he consumes, but he is also heavily taxed on improvements.  A tax on land values would be very large in the cities, or where land values are high, and the tax on agricultural land would be very small. 

How would it affect the house owner?
He would gain greatly, for the greater part of tax which he now pays is based upon the value of his house which is usually much greater than the value of the land.  Of this, as well as of all indirect taxation, he would be relieved.

Would the placing of all taxation upon land values improve the condition of these who work?
Yes.  If land were taxed to its full rental value no one could afford to hold valuable land idle; the holder must either use it himself or allow others to use it.  This would create a great demand for labour, and all wages would rise.

How would it affect the temperance question?
Through abolition of poverty it would solve the temperance question; poverty and the vice which springs from poverty, are the great causes of intemperance.

This catechism was published along with something of Henry George's by the Darlington Single Tax League in the 1920s.  Google Books has a page for it, but does not provide the text.

For some other Single Tax catechisms, check out thesingletax.com, the shorter pieces.

NYT: Whatever Happened to the American Left?

Whatever Happened to the American Left? - NYTimes.com. - Sunday NYTimes opinion piece
by Michael Kazin, of Georgetown University, author of “American Dreamers: How the Left Changed a Nation."

It begins:

SOMETIMES, attention should be paid to the absence of news. America’s economic miseries continue, with unemployment still high and home sales stagnant or dropping. The gap between the wealthiest Americans and their fellow citizens is wider than it has been since the 1920s.

And yet, except for the demonstrations and energetic recall campaigns that roiled Wisconsin this year, unionists and other stern critics of corporate power and government cutbacks have failed to organize a serious movement against the people and policies that bungled the United States into recession.

Instead, the Tea Party rebellion — led by veteran conservative activists and bankrolled by billionaires — has compelled politicians from both parties to slash federal spending and defeat proposals to tax the rich and hold financiers accountable for their misdeeds. Partly as a consequence, Barack Obama’s tenure is starting to look less like the second coming of F.D.R. and more like a re-run of Jimmy Carter — although last week the president did sound a bit Rooseveltian when he proposed that millionaires should “pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare.”

How do we account for the relative silence of the left? Perhaps what really matters about a movement’s strength is the years of building that came before it. In the 1930s, the growth of unions and the popularity of demands to share the wealth and establish “industrial democracy” were not simply responses to the economic debacle. In fact, unions bloomed only in the middle of the decade, when a modest recovery was under way. The liberal triumph of the 1930s was in fact rooted in decades of eloquent oratory and patient organizing by a variety of reformers and radicals against the evils of “monopoly” and “big money.”

excerpts:

THE seeds of the 1930s left were planted back in the Gilded Age by figures like the journalist Henry George. In 1886, George, the author of a best-selling book that condemned land speculation, ran for mayor of New York City as the nominee of the new Union Labor Party. He attracted a huge following with speeches indicting the officeholders of the Tammany Hall machine for engorging themselves on bribes and special privileges while “we have hordes of citizens living in want and in vice born of want, existing under conditions that would appall a heathen.”

George also brought his audiences a message of hope: “We are building a movement for the abolition of industrial slavery, and what we do on this side of the water will send its impulse across the land and over the sea, and give courage to all men to think and act.” Running against candidates from both major parties and the opposition of nearly every local employer and church, George would probably have been elected, if the 28-year-old Theodore Roosevelt, the Republican who finished third, had not split the anti-Tammany vote.

Despite George’s defeat, the pro-labor, anti-corporate movement that coalesced around him and others kept growing. As the turn of the century neared, wage earners mounted huge strikes for union recognition on the nation’s railroads and inside its coal mines and textile mills. In the 1890s, a mostly rural insurgency spawned the People’s Party, also known as the Populists, which quickly won control of several states and elected 22 congressmen. The party soon expired, but not before the Democrats, under William Jennings Bryan, had adopted important parts of its platform — the progressive income tax, a flexible currency and support for labor organizing.

During the early 20th century, a broader progressive coalition, including immigrant workers, middle-class urban reformers, muckraking journalists and Social Gospelers established a new common sense about the need for a government that would rein in corporate power and establish a limited welfare state. The unbridled free market and the ethic of individualism, they argued, had left too many Americans at the mercy of what Theodore Roosevelt called “malefactors of great wealth.” As Jane Addams put it, “the good we secure for ourselves is precarious and uncertain, is floating in mid-air, until it is secured for all of us and incorporated into our common life.”

and

IN the late 1970s, the grass-roots right was personified by a feisty, cigar-chomping businessman-activist named Howard Jarvis. Having toiled for conservative causes since Herbert Hoover’s campaign in 1932, Jarvis had run for office on several occasions in the past, but, like Henry George, he had never been elected. Blocked at the ballot box, he became an anti-tax organizer, working on the belief that the best way to fight big government was “not to give them the money in the first place.”

In 1978 he spearheaded the Proposition 13 campaign in California to roll back property taxes and make it exceedingly hard to raise them again. That fall, Proposition 13 won almost two-thirds of the vote, and conservatives have been vigorously echoing its anti-tax argument ever since. Just as the left was once able to pin the nation’s troubles on heartless big businessmen, the right honed a straightforward critique of a big government that took Americans’ money and gave them little or nothing useful in return.

I don't know whether Dr. Kazin has read Henry George's unnamed best-selling book recently -- I suspect he has read it at some point -- but he clearly didn't see the connection between George's central point and what Howard Jarvis did to the people of California via Proposition 13.  Prop 13 is the antithesis of what George told his readers -- some 6 million copies of Progress and Poverty were sold in the 20 or so years following its publication in 1879 -- was necessary if we were to create a society in which we all start off genuinely equal.  (My characterization, not George's.)  Those who have read P&P know exactly why California leads the nation in foreclosures, and know the necessary-if-not-sufficient route to solving many of that state's economic problems.

George proposed to eliminate all taxes other than a tax on the value of land -- that is, he proposed to collect for common purposes the lion's share of the annual rental value of land, and not to tax imports, sales, wages, buildings, personal property, etc.   Jarvis's Prop 13 put a low cap on how much could be collected in property taxes (in 1978, 1% of the 1975 value of the property, plus a maximum of 2% annual increase -- until the property was sold, at which point the assessed value would be reset at the selling price).  George's land value tax would have collected the annual rent (quick and dirty: 5% of the selling value of the land in the absence of any property tax; nothing on the value of any improvements to the land).

It is no wonder that California's schools, libraries, universities, etc., are underfunded and not serving their intended purposes; that its economy is suffering under the burden of sales and income taxes.   But all anyone writes about Prop 13 is "third rail of California politics" and "'populist' revolt." 

But, as my mother would have put it, our educations have been neglected.  Few of us have any basis for understanding that some taxes are actually good.  (Even Milton Friedman, arguably inspired by Lowell Harriss, recognized land value taxation as the "least bad tax," though he apparently never considered putting his shoulder to the effort to enact it.  One might wonder why -- and consider who buttered his bread, and why someone as brilliant as he never seemed to be conscious of it.)

George, incidentally, was neither left nor right, but represented a third way which appealed to a broad spectrum of Americans and others.

It has been suggested that part of why we celebrate Labor Day when we do is that George's birthday was September 2.  I don't know if that's so, but it would certainly make sense.  He advocated for ordinary people.  "I am for men!" 

If you'd like to know more -- in my mother's words, to fill in the gaps in your neglected education -- you might take a look at these pages, and the links from them:

• http://wealthandwant.com/George_P&P.html
• http://wealthandwant.com/#book

I'm not sure the left -- as well intended as they see themselves -- can help us.  They're no better educated in Georgist economics than the right is.  But each can educate himself, and therein lies hope.

Further reading:

• Mason Gaffney's "After the Crash: Designing a Depression-Free Economy"  and a related interview
• Walt Rybeck's "Re-solving the Economic Puzzle" 

Neither the left nor the right will claim these as their own -- but they ought to read and embrace them.

The Golden Rule: Equal Rights to all and special privileges to none

I thought this presentation -- made nearly 100 years ago, in December, 1911, to County Assessors in California -- worth sharing. (Merriam-Webster defines plunderbund as "a league of commercial, political, or financial interests that exploits the public.")    That such a paper would be delivered to such a body gives one a hint of how widely understood and appreciated Georgist ideas were 100 years ago.  The notes say:

"Mr. Edmund Norton presented a paper entitled "What is Single Tax?" Upon conclusion of the reading, which was interspersed with many extemporaneous remarks by the speaker, a very free discussion of the subject was held, and many interrogatories propounded to the author of the paper."

I'll give you the final paragraphs first, and then the whole talk.

Never, while the world lasts, will mankind become "Masters, lords and rulers" of themselves till these public values are publicly absorbed in taxation. The Single Tax is the most feasible, practical, expedient, simple, natural and just way of making the necessary, rational change without the violence of revolution. It stands "four square to all the winds that blow" — in economics, and politics; in ethics, morals and religion; in principle, science and philosophy; it is the practical application of Christianity to social affairs. "Equal Rights to All and Special Privileges to None," is the translation of the Golden Rule of the Nazarene to an economic and political formula. Therefore, fulfilled democracy is applied Christianity to governmental affairs.

"Do unto others as ye would that they should do to you," "Equal Rights to all and special privileges to none"; the Single Tax: these are synonymous.

Here we have the great Eleventh Commandment of the Master of Nazareth — the sum total of all "the Law and all the prophets" — we have its Jeffersonian formulation into a politico-social maxim of "Equal rights to all," and its scientific practical application in the Single Tax of Henry George. This is applied Christianity; this is democracy; this is Georgean philosophy; this is the Single Tax; different expressions of the one Unity.

and here's the whole thing:

WHAT IS THE SINGLE TAX?

The Georgean Philosophy and the Jeffersonian Formula.
By Edmund Norton.

Never in the history of the world have there been so many inquiring minds asking: "What is the Single Tax and the Georgean Philosophy?" In England, Germany, Australia and Canada, as elsewhere, the constructive work of the leading statesmen is all being developed along the lines laid down by Henry George. To my mind, "The Prophet of San Francisco," as he was derisively dubbed by the Duke of Argyle, is, measured by his influence on the world of statesmanship, present and future, and as a sociological thinker, the greatest personality in the Western world between the North Pole and Patagonia since Columbus found the land. Henry George has found more continents than did Columbus by uncovering monopoly-submerged lands in the presence of which we hungered and died.

This paper is meant to merely outline the principles and philosophy of the great school of thought that has grown up in the last thirty years around its teachings that now has a literature of its own that will fill a library.

The Single Tax is the popular name of the great fiscal reform and social philosophy most powerfully promulgated by our great American, Henry George, sometimes called "the Prophet of San Francisco."

WHAT IT PROPOSES TO DO.

Its purpose is to increase wages to the full returns or earnings of labor; to shorten the hours necessary to earn a living; to leave to capital, which is secondary labor, its full returns, which are secondary wages; to abolish monopoly, which is the thief that is robbing both labor and capital, and thereby prove the unity and remove the apparent antagonisms which have no place in a natural order where monopoly does not exist. It will free production, including all trade, barter and exchange, which are but processes of production, and will equalize the distribution of wealth into the possession only of those who can earn it. It will destroy privilege by substituting equal natural rights, remove the dead hand from the control of living men; throw open the limitless natural resources of the planet to willing labor, and, by taking all social creations of value into the social treasury, will conserve all natural resources forever to the people and make private appropriation of public values impossible. This condition will start a boom that will never stop till every human want is satisfied.

It will make internecine and international wars impossible by destroying all trade and monopoly privileges which are the chief causes tempting the crafty, cunning and unscrupulous to create or encourage these sum totals of all vices, crimes and horrors against humanity for personal power and profit.

THE METHOD OF ATTAINMENT.

The Single Tax does not intend to add to or multiply the already almost infinite statutory enactments now confusing and befuddling the social state, but rather means to abolish, one after the other, every law on the statute books granting a special privilege to any one man or body of men that is at the expense of the unprivileged mass of society. This will destroy the petty and grand larceny now preying upon the social body.

Aside from the million of petty privileges granted by municipalities, states and the nation to individuals, the great and glorious pillage shows itself in privileges and monopoly in labor-saving inventions, trade restrictions and the private ownership of natural resources, the major part of which is a matter of taxation; therefore, the Single Tax would abolish all taxes on barter, trade, exchange, personal property and improvements, commensurately raising all taxes from the value of land alone, till there was in existence but one single tax upon the value of bare land exclusive of improvements. This would be a single tax on land value — not on land, for some land would pay no tax while other land would pay much tax.

For instance, one acre of land worth a million dollars would pay as much tax as a million acres worth only one dollar per acre.

SQUARES WITH THE MORAL LAW.

The Single Tax is ethically sound in application for the simple reason that all labor-created wealth is the result of individual effort and leaving that wealth untaxed would be leaving to the individual only that which belonged to him by his right to himself and to that which he himself creates; while taking into the public treasury only those values which society creates in its collective capacity would be leaving to society only that which belongs to it, for no individual on earth, by himself, can create land values.

At present we compound injustice by permitting private individuals to appropriate what society creates and then society turns about and deprives the individual of his private creation to support the governments whose existence makes possible the public values privately appropriated.

This basic injustice results in a fundamental disturbance of the equilibrium of society, showing itself in numberless evils — economic, social, political, physical, mental and moral.

Mistaken symptoms for disease, effects for causes, we have numerous social quacks pressing forward with innumerable nostrums — palliative, alleviative, suppressive or curative of the particular symptoms they have noted — each claiming he has found a remedy and each ready to cure the world with a salve, bandage, pill or liniment.

The diseased social body can be cured only by removing the cause and restoring it to a normal condition. Monopoly and Special Privilege is all that the social body suffers from today, and destruction of Monopoly and Special Privilege will cure it. Equal rights to All and Special Privilege to None is the only magic remedy. Apply this, make man free and equal before the law and the Divine Mind operating through nature will do the rest.

JEFFERSON'S FORMULA.

Thomas Jefferson's was probably the greatest democratic mind of his age and the equal of any age. If we examine the Jeffersonian formula we will find it the square, level and compass, without which no nation can ever be permanently founded., The natural rights of man, "life, liberty and the pursuit of happiness," we must take for granted, and the right of revolution — also put forth in the immortal document — "the Right of the People to alter or to abolish and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness" we must also take for granted.

The constitution — itself a reactionary document, taking away from the people perhaps 75% of the liberties gained in the war of 1776 — still leaves us the power to apply the golden rule of democratic thought to our government without violence — for which we may be thankful.

EQUAL RIGHTS; NO SPECIAL PRIVILEGE.

If we view the recent, present and past history of Los Angeles, San Francisco, Colorado, Springfield, New York, Albany, Pittsburg, and the nation at large, we will have to confess that now and for fifty years past, at least, municipality, state and nation have been passing through a Saturnalia of public pillage by Special Privileges working through varying forms of oligarchic, partisan and political control. The government has been wrested from the hand of Democracy by Plutocratic privileges.

Applying the rule of Equal Rights to All, we clearly see that while these rights exist, the power to exercise them has been nullified; therefore, all of these reforms such as the Initiative, Referendum, Recall, Commission Government for cities, Direct Primaries and Popular Senatorial elections, are democratic efforts for the restoration of the Mechanics of Government into the hands of Equal Citizens.

I say the Mechanics of Government, for in no sense will the people be at all benefited permanently, even by the perfection of these reforms, which are but tools of government to develop efficiency of popular expression, unless they grasp these economic truths and change or readjust economic conditions. Indeed they might be worse off, for having captured these means completely, they might mistake them for ends, and believing their victory full, might slumber while being worse pillaged, which has been the case in the past.

I wish to inject here one pertinent suggestion — cities, within themselves, should have absolute right to exert self-government in all things within their borders that do not infringe upon the equal freedom of other cities, the state or nation, especially in matters of taxation.

SOME FISCAL FACTS OF LOS ANGELES (1910).

Having eliminated, then, the mechanics of government, suppose we apply our rule to the fiscal and economic conditions existing in our city of Los Angeles, and nearly every other city.

During the last fiscal year we raised about $5,000,000 in taxes imposed on land values, improvements, personal property and license — fines, which amounted to some $650,000. Now, there is no civic, fiscal or economic excuse for license, business and occupation fines other than police regulation or revenue raising.

Police regulations have no reason for existence except to protect the citizens from infringement on his equal rights, and to grant a special privilege under any name whatever for some persons to possess to the exclusion of other persons, is a wrong that breaks our golden rule of Democracy and should be abolished on that ground alone.

For Government to grant these powers of wrong doing on receipt of a stipulated share of the profits of the wrong, is to participate in, sanction and legalize the wrong and thereby corrupt society at its fountain head by official and statutory enactments.

Again, varying the cost of these granted privileges from $1.00 to $200.00 or more per month is absurdly unjust, unequal and discriminative, for or against certain businesses, making another breach of the rule calling for their abolition.

The effect of these fines is to act as trade restrictions, as interference with production, and to centralize business in the hands of a dominant privileged class. They are national protective tariff superstitions localized for the benefit of civic plunder.

Here I wish to call your attention to a vital, absolute, commercial and economic law: ''All taxes on things produced by human exertion enter into the cost of production and are paid for by the ultimate consumer."

If we grasp this fact in its fullness we will see that these fines and taxes effect not so much the middlemen who are compelled by this inexorable law to add them to the price, as it does the ultimate consumer, who is the whole body of society. Thus we do not hit the one we imagine, but simply strike ourselves.

To abolish them would be to free trade, diffuse business, accelerate its activity and lower prices to the ultimate consumer, permitting him to retain a greater amount of his earned wealth.

If we could so emphasize this one law as to make all see it, the ideals of democracy would be here.

I have laid particular stress on this all-important law because it applies not only to license fines but to all personal property and improvement taxes — on everything made by man. Therefore, in all forms of wealth in course of production there are no real taxpayers but the ultimate consumers — the intermediary is only a tax shifter. This is vital.

The Single Tax would abolish all these taxes; so would the Jeffersonian formula. In the two we have a principle and a method for its practical application.

To extend this practical application of the Democratic Principle to all things — including the international tariff — would immediately destroy the nightmare of high prices and flood the world with limitless possibilities of trade. This trade is now stifled and vast amounts of wealth are wrongly diverted to the possession of those who do not create or earn it.

The question arises: Where would you get the money to run the government if the Single Tax theory were put into operation? Of course! Why, there would be no place to get it except from land values. Here is something fastened to the world — possibly by the "Big Nail" of the North Pole — anyway it is where it can be seen; it can't run away, hide in a hole nor be loaned to a convenient friend in an adjoining county when the assessor comes around.

The millions of varieties and values of other forms of property being eliminated, scientific simplicity would be possible in taxation. Taking into the public treasury publicly created values in the form of a tax and leaving in the possession of private individuals their private creations, by tax exemptions, would square with the moral law. Incidentally, "Conservation of natural resources" would become an accomplished fact in city, state and nation; for the taxing power involved in the private possession of the "Unearned Increment," "Land Values," "Economic Kent," or "Ground Rent," is a governmental power now privately possessed, obtained by grant, theft or tax evasion. It is a special privilege held only by land owners — the abolition of which is necessary to the restoration of equal rights to all.

The private possession of a governmental privilege is, moreover, the prime motive — the chief incentive — to all the speculative holdings of idle city lots, agricultural, mining, timber, coal and oil lands, and all other natural resources. It is responsible for 90% of the speculative gambling that is prostituting city councils, state legislatures, the national government and even threatening the judiciary itself.

In fact, this basic injustice is at the bottom of 90% of all the vice, crime and graft — public and private — from which society is now suffering. The removal of the cause by the socialization of land values through the application of the Single Tax, would destroy the incentive, divert the evil tendencies to the best instead of the worst in society, displace an abnormal condition by a normal one, and cut out, eventually, the 90% of evil which we now deplore. The victories opening to us under these possible conditions are only picturable by the poet or the seer.

The Single Tax will remove unjust conditions by a rational, expedient process of readjustment. It will restore to the individual his freedom and to the state its own values.

The right to "Life, Liberty and the Pursuit of Happiness," "Equality of Opportunity," "Equality of Rights," and destruction of Special Privilege, all demand its enactment as the only natural and perfectly sane method of squaring these demands.

The equal right to life can never be guaranteed until equal right to the natural opportunities upon which that life depends is also guaranteed. A denial of one is the denial of the other.

The opening up of the limitless storehouse of nature on this continent alone, by the destruction of its monopoly, would be equivalent to discovering several new continents.

Labor and capital, unrestricted, would flow to these opportunities as the sparks fly upward. Relieved of the pressure at the bottom and congestion of trade restriction removed from the top, who can tell the wonderful possibilities of America?

Here, toward the last, we come in contact with another vital related problem: that of the functions and ownership of highways — national, state, county and municipal.

These highways are, in organ and function, to the social body, what veins, arteries and nerves are to the human body. They are the channels of communication and transportation for persons, property and intelligence. Interference, restriction, congestion — all tend to varying disorders in the social body. Perfect freedom to normal action is the solvent. Private control of a public function is privileged ownership of a governmental power which should never be tolerated in a state of equal freedom. In fact, equal freedom is impossible where special privileges of government are farmed out to private individuals.

It will be noted that practically all private possessions of land on the continent, except those facing free waterways, are criss-crossed, intersected and separated by these highways. Theoretically we can easily see that, should we grant absolute ownership of highways to one individual — even were every other adjustment on earth perfected — that one individual would be master of the continent, for no possible intercommunication of persons, property, or intelligence could take place on, by, through or across these arteries and nerves without his consent, which condition, if submitted to, would make him sole arbiter of the world.

What is true of the whole is fractionally true of any part. We can never establish Equality of Right till absolute freedom of highway is guaranteed. Private possession of highways is no more necessary to private possession of property than is private possession of the ocean necessary to private ownership of ships.

In fact, the rights of private property are abrogated when governmental power to exact tribute from private property is granted to a privileged few; therefore, "Equal Rights to All and Special Privilege to None,'' demand the application of the Georgean philosophy to highway functions as a democratic and not a socialistic measure.

When we remember that these privileges now controlled (facts of 1900 since accentuated) by the national steam railways alone are capitalized at $8,000,000,000 in excess of the $5,000,000,000 of actual cost, we can see the enormity of one form of special privilege and the corresponding abrogation of natural property rights.

In passing, I will say that there are three practical methods by which these rights may be restored.

(1) Government control, ownership and operation of entire systems;

(2) Government control, ownership and operation of roadbeds only through official control of despatching service — leaving free operation of untaxed capital in all else, or:

(3) Public taxation of all incomes and values in excess of current rate of interest on actual capital — said capital otherwise untaxed.

The practical applications of these principles are mere matters of detail, expediency and policy. The brains that organize and manipulate these gigantic social plunders in all their minutia, can just as well work out the details of public restitution when deprived of activity in private depredations — and would be glad of the job.

Applied, this would mean the destruction of special privilege in national railways, telegraph, telephone, street railways, water, light, heat, power and all other monopolies of highway function.

This, with absolute free trade and the taxation of land-values through all other things being exempt, would mean the complete abolition of "Special Privilege" in all things; the institution of "Equal Rights" the "Conservation of Natural Resources,'' and the restoration of "Equal Opportunity to All." When all this is done — and never until it is done — there will be left nothing but the individual problem for man to solve.

Again let me interject a vital suggestion: Had we absolute free trade — international, state and local — including absolute freedom of highways, which is but an extension of freedom of trade — in truth, had we reached perfection in production — for this all means freedom in production — had we all these things while still leaving the "Unearned Increment, or Economic Rent,'' in the hands of the land-owner — there would be no permanent benefit to society except that incident to the transitional period of readjustment. Eventually all these wonderful benefits would clearly raise nothing but land-values and make the plunderbund richer and mightier than ever. The rise and fall of land values measure all the advances of civilization and their private appropriators are the "Masters, lords and rulers in all lands'' of whom the poet spoke.

Never, while the world lasts, will mankind become "Masters, lords and rulers" of themselves till these public values are publicly absorbed in taxation. The Single Tax is the most feasible, practical, expedient, simple, natural and just way of making the necessary, rational change without the violence of revolution. It stands "four square to all the winds that blow" — in economics, and politics; in ethics, morals and religion; in principle, science and philosophy; it is the practical application of Christianity to social affairs. "Equal Rights to All and Special Privileges to None," is the translation of the Golden Rule of the Nazarene to an economic and political formula. Therefore, fulfilled democracy is applied Christianity to governmental affairs.

"Do unto others as ye would that they should do to you," "Equal Rights to all and special privileges to none"; the Single Tax: these are synonymous.

Here we have the great Eleventh Commandment of the Master of Nazareth — the sum total of all "the Law and all the prophets" — we have its Jeffersonian formulation into a politico-social maxim of "Equal rights to all," and its scientific practical application in the Single Tax of Henry George. This is applied Christianity; this is democracy; this is Georgean philosophy; this is the Single Tax; different expressions of the one Unity.

 

The FIRE sector

I'm re-reading Robert Reich's recent NYT piece, which sits open on my computer:

By 2007, financial companies accounted for over 40% of American corporate profits and almost as great a percentage of pay, up from 10% during the Great Prosperity.

and

The economy cannot possibly get out of its current doldrums without a strategy to revive the purchasing power of America’s vast middle class. The spending of the richest 5% alone will not lead to a virtuous cycle of more jobs and higher living standards.

If you've seen the film "Inside Job"  -- and even if you haven't -- you are probably at least somewhat aware of the extent to which the FIRE sector is, in the immortal words of someone I worked for years ago, "eating our lunch."

A recent column by David Cay Johnston provided an interesting graphic showing officer compensation as a percentage of corporate profits.  In recent years, that percentage has ranged from a low of about 23% in 2005 to a high of about 67% in 2002, with the most recent year, 2008, being about 48%.     So for 2008, it is "1 for 'us,' 2 for the shareholders."   Now his study extends far beyond the top corporate executives; he's looking at an IRS database that includes nearly 1 million corporate officers, and it may well be that the top, say, 2% of that rarified universe takes a hugely disproportionate share of the total compensation.   However, DCJ raises a very important question, which I take to be a challenge that someone in Congress should ask the Congressional Budget Office to look into, to determine whether companies -- particularly nonpublic ones -- are understating officer pay by not filing Schedule E.   And he says,

Existing IRS corporate tax reports have for years shown us that fewer than 2,600 megafirms own 81% of all U.S. corporate assets. Another 21,000 firms control most of the rest, leaving just 5.6% of corporate assets that are divvied up among the more than 5.8 million remaining corporations.

and

The 2008 data show that while almost three million corporate officers show up on company tax returns, only 990,077 Social Security numbers do and of those only 838,551 show up as being paid. That may suggest some owners took no pay in the Great Recession year of 2008, but it also hints at how many officers serve multiple corporations.

The officer pay data show huge variations. Just 70 officers of 1,660 Real Estate Investment Trusts averaged $5.2 million in 2008, while 832 officers of 7,670 property and casualty insurers averaged $3.8 million. At the other end, more than 2.1 million officers of S Corporations averaged just $107,403, though many of them must be officers of multiple corporations.

The FIRE sector.  Finance, Insurance and Real Estate.   Most Americans, even those who were economics majors in college, don't know the mechanisms by which these parts of the economy get to be such amazing sponges.  For the most part, the economics majors learned their economics from instructors whose own education was primarily in neoclassical economics, which only sees two main inputs to production -- Labor and Capital -- and somehow tuck Land in as a minor subset of Capital, rather than recognizing, as the classical economists did, that Land -- locations, natural resources and like things -- is unique and vital.  The common wisdom knows "Buy land: they aren't making more of it" but doesn't realize the monstrous and far-reaching corollaries.   Who does know?  Those whose adult reading experience includes the ideas of Henry George, particularly "Progress and Poverty" and "Social Problems."   And "The Science of Political Economy" has a lot to say about vested interests and their effects on economics.   (You're likely to find some very quotable material!)   All three are online.

Joe Stiglitz, last summer at a talk in Queensland, Australia, made remarks that were reported as follows:

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% 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)."

 

Public Revenue for Libraries

One of my standing google alerts took me to an editorial in a northern California newspaper endorsing the call for a 1/8 cent sales tax on all goods sold within the county to support the town's library, which, because of Proposition 13, receives no funding from the county.  They have exhausted their ability to do fundraisers, have no acquisition budget, and if the library goes from its current 3 or 4 days a week to none, the existing collection will be divided up and people will have to drive to one of the other 2 libraries in the county.

I tried to post a comment, but they seem only to accept comments through Facebook, and I'm not a FB subscriber.  So I'll share my comment here:

Amenities like libraries and good schools and well-maintained streets, among many others, are what make a community a good place to live.  They support and increase land values; they don't change the value of the structures that sit on that land. 

The sensible way to finance them is through taxes proportionate to land value.  Those who own a large, well-located lot pay the most; those who own a small share of a large, well-located lot pay their share of that lot's value; those who own a small, well-located lot, close to the amenities people find desirable, pay in proportion to the value of their location, not to what they paid for their property, be it last year, 5, 10, 20, 30 years ago.  Those who own an off-on-the-edge postage stamp pay little or nothing (whether they've put a cottage or castle on that little lot.).

I understand that you're trying to solve a local problem, but the underlying mess created by Prop 13 needs to be corrected.

Taxing sales drives sales out of town.  That burdens hardworking people who own and work in the shops that sell taxed goods in your community.  (It probably won't hurt the landlords much.)  Wage taxes are no better.  Building taxes ditto.  We shouldn't use them!

In the 1870s, a Tennessee businessman wrote to his governor,

Never tax anything
That would be of value to your State,
That could and would run away, or
That could and would come to you.

Your town needs to make it clear to your state that Proposition 13 forces you to do stupid things.  Jon Coupal and his fellow Prop 13 supporters are not working to make California better for ordinary people.  They have something else in mind.

There are a thousand hacking at the leaves.  Go to the root of the problem and eradicate it.  Prop 13 is the root of this one (and many others).  It has forced California's towns into dishonest assessments and put a low cap on what is arguably the wisest, most just tax ever proposed (land value taxation).

It was a California newspaperman, Henry George, who saw most clearly and wrote most eloquently on this topic.  Look for his 1879 book, "Progress and Poverty," written in San Francisco.  You can find a modern abridgment online at http://www.progressandpoverty.org/ and more about him and his ideas at http://henrygeorge.org/ or the URL's below. (For example, the board game Monopoly is based on The Landlord's Game, which someone developed circa 1902 to teach the wisdom of George's ideas.  It came with 2 sets of rules, one similar to the game we play today, and another called the "prosperity rules."  Dull game, but sustainable society!)    Prop 13 is the antithesis of what George's analysis showed was the way to a good life for ordinary people.

Why they might hate us

As I listen to the accounts of what was on the computers in the compound where Osama bin Ladin was living, including ideas for attacking American commuter railroads, my mind turns to why people in other countries might have such hatred for America.

Perhaps it has something to do with the fact that we are using, month in and month out, such a disproportionate share of the world's finite natural resources, and our corporations (and multinational corporations, too) are profiting hugely from withdrawing those resources from land around the world without adequately compensating the peoples of those countries -- not the current leaders but also the future generations of peoples -- for what is being taken out.  In our name.

Then my mind turns to the distribution of those benefits in this country.  Ads from the Petroleum Institute remind us that half of us own stock, and suggest that if we own stock, we benefit from letting that industry have its way.  Well, sort of.  But it is worth noting that stock ownership in publicly held companies is rather concentrated in the top 5% of our population [data source: 2007 Survey of Consumer Finances, Federal Reserve Board], who own 66.5% of the value.  And just as important, the value of privately held companies is even more concentrated, with 88.1% residing in the top 5%.  The latter category is actually larger than the former, in terms of household wealth.  [Some might argue that pension funds hold stock for bottom 95%-ers -- but relatively few of us have defined benefit pensions any more, and we ought not to be swayed by that one!]

Why do they hate us, if they do?  Because we are consuming 2 to 4 times our per capita share of the world's resources, and there are others who can't get their per capita share as a result.  And maybe because some might have reason to suspect that the extremes of weather that many parts of the world seem to be experiencing are a result of our disproportionate pollution of the environment.

So how do we revise our incentives so that we structure things better? 

To the best of my knowledge, the answers lie in the ideas commonly associated with Henry George.  Explore this blog.  Explore wealthandwant.com.  Read George's books, "Progress and Poverty" and "Social Problems" (a collection of essays) online.  Explore Mason Gaffney's website.  See what you think.  Is there a better way?  Is there a way to better organize things to create a better, more peaceful, more just, more sustainable world, in which all of us can prosper, and none can reap what others sow?

Pen's Parade: do you realize we're mostly dwarves?

.... and how we might correct the distribution.

I came across a spectacularly good graphic the other day.  I don't know that it will reproduce here, so I'll just provide you the link:

http://assets.theatlantic.com/static/coma/images/issues/200609/Height.jpg

Open it in another window, let it fill the screen, scrolling if necessary to see it in full -- and then continue reading here.

It comes from a 2006 article in The Atlantic Monthly entitled "The Height of Inequality," which lays out very well the extent of the income inequality we have in America, though it starts with an explanation done in 1971 by Dutch economist Jan Pen, describing the distribution of income in the British economy at that time. (I've put part of it into bullet format.) It begins,

In 1971, Jan Pen, a Dutch economist, published a celebrated treatise with a less-than-gripping title: Income Distribution. The book summoned a memorable image. This is how to think of the pattern of incomes in an economy, Pen said (he was writing about Britain, but bear with me). Suppose that every person in the economy walks by, as if in a parade. Imagine that the parade takes exactly an hour to pass, and that the marchers are arranged in order of income, with the lowest incomes at the front and the highest at the back. Also imagine that the heights of the people in the parade are proportional to what they make: those earning the average income will be of average height, those earning twice the average income will be twice the average height, and so on. We spectators, let us imagine, are also of average height.

Pen then described what the observers would see. Not a series of people of steadily increasing height—that’s far too bland a picture. The observers would see something much stranger. They would see, mostly, a parade of dwarves, and then some unbelievable giants at the very end.

• As the parade begins, Pen explained, the marchers cannot be seen at all. They are walking upside down, with their heads underground—owners of loss-making businesses, most likely.
• Very soon, upright marchers begin to pass by, but they are tiny. For five minutes or so, the observers are peering down at people just inches high—old people and youngsters, mainly; people without regular work, who make a little from odd jobs.
• Ten minutes in, the full-time labor force has arrived: to begin with, mainly unskilled manual and clerical workers, burger flippers, shop assistants, and the like, standing about waist-high to the observers. And at this point things start to get dull, because there are so very many of these very small people. The minutes pass, and pass, and they keep on coming.
• By about halfway through the parade, Pen wrote, the observers might expect to be looking people in the eye—people of average height ought to be in the middle. But no, the marchers are still quite small, these experienced tradespeople, skilled industrial workers, trained office staff, and so on—not yet five feet tall, many of them. On and on they come.
• It takes about forty-five minutes—the parade is drawing to a close—before the marchers are as tall as the observers. Heights are visibly rising by this point, but even now not very fast.
• In the final six minutes, however, when people with earnings in the top 10 percent begin to arrive, things get weird again. Heights begin to surge upward at a madly accelerating rate. Doctors, lawyers, and senior civil servants twenty feet tall speed by. Moments later, successful corporate executives, bankers, stock­brokers—peering down from fifty feet, 100 feet, 500 feet.
• In the last few seconds you glimpse pop stars, movie stars, the most successful entrepreneurs. You can see only up to their knees (this is Britain: it’s cloudy). And if you blink, you’ll miss them altogether.
• At the very end of the parade (it’s 1971, recall) is John Paul Getty, heir to the Getty Oil fortune. The sole of his shoe is hundreds of feet thick.

As Garrison Keillor ironically informs his listeners, not every child can be above average. But when it comes to incomes, the great majority can very easily be below average. A comparative handful of exceptionally well-paid people pulls the average up. As a matter of arithmetic, the median income—the income of the worker halfway up the income distribution—is bound to be less than average.

This is true in every economy, but in some more than others. Back when Pen wrote his book, incomes were already more skewed in America than in Britain. Over the past thirty-five years, and especially over the past ten, that top-end skewness has greatly increased. The weirdness of the last half minute of today’s American parade—even more so the weirdness of the last few seconds, and above all the weirdness of the last fraction of a second—is vastly greater than that of the vision, bizarre as it was, described by Pen.

The article goes on to point out that (1) at the time, the US giants were even taller than the British ones; (2) that in the intervening years, a highly disproportionate share of US income has gone to make the giants taller yet in proportion to the rest of us.   It quotes a study suggesting that a large share of the top income earners were sports and media celebrities and top corporate executives.   13,000 people in the 99.99th percentile, with total earnings of $83 billion in 2001.  (an average of $6.4 million, so some are much higher, many a lot lower.)   In 2001, there were probably relatively few Hedge Fund managers pocketing billions each (and their incomes are likely not shown as wages, but rather as "capital" gains, taxed at less than all but our lowest wage earners must pay in federal income taxes, and not subject to Social Security or Medicare taxes.

Most of us, as the article points out, have a big problem with sports or media celebrities receiving large incomes, considering it a "perfecting of the labor market."  But how is it that corporate executives get to harvest so much?  We know about hand-picked board compensation committees which reward their pickers with high incomes, whether or not performance has been strong.  But do we think about just how it is that there is so much for them to work with?  Do we know why so little goes to the rest of the parade in wages?    We're so used to the situation that we no longer examine it.  Even your family's college economics major probably has never been exposed to a serious examination of the question.  Air to the bird, water to the fish -- just the environment we live in, not even interesting enough to study, until it no longer supports life.

Here's an account of a talk Joe Stiglitz gave last summer during his lecture tour in Australia, which might shed some light on how so much is available for those corporate executives and their compensation committees, as well as for the shareholders:

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)."

Why aren't the workers getting more?  In large part because there isn't competition for their labor.  Why is this the case?  In part because our natural resources are being given out -- at bargain prices -- to corporations which have monopolized them.    And, while about half of us have some stock, stock ownership of publicly held companies is quite concentrated (top 5% hold 66.5%), and ownership of privately held companies (a larger figure at the household level) even more so (top 5% hold 88.1%).

So how do we create more competition for the services of workers?  How do we create more opportunity for all to employ themselves if they don't like their chances with other employers?  To find out, explore this blog, explore the ideas associated with the name of 19th century economist and philosopher Henry George.

Political economy is the science which deals with the natural laws governing the production and distribution of valuable goods and services.  I'll also reference Adam Smith's definition:

Political economy considered as a branch of the science of a statesman or legislator proposes two distinct objects, first, to supply a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public service. It proposes to enrich both the people and the sovereign.

Which people?  All people?

John Dewey on "Progress and Poverty"

This comes from an April, 1924, Single Tax monthly from California called Tax Facts:

JOHN DEWEY ON A GREAT BOOK

Owing to the fact that certain extremists and fanatics have tried to read into Henry George's works ideas that he never intended to convey, a great many people who never read them have gotten the notion that he advocated Socialism, Communism, Bolshevism, or some other wild plan that would destroy private property. As a matter of fact Henry George was an individualist, a democrat, and believed most emphatically in private property.

As an example of what men think who have studied George's works, and are therefore qualified to express an opinion, the following letter to Mr. E. B. Swinney by Prof. John Dewey of Columbia University, is offered.

"In reply to yours of the 28th, I would state that for many years, ever since first familiarizing myself with the principle of the Singletax, I have regarded it as both theoretically and practically sound, and an indispensable basis of much needed social reform.

"I may add that I am a great admirer of the general social philosophy of Henry George, whose contribution to intellectual thinking about social matters, even quite apart from his practical proposals, does not seem to me to have received the recognition it deserves among thinking people.

"Sincerely yours,

"(Signed) JOHN DEWEY."

As one cannot read everything, one must take many ideas on the judgment of others. But since the abridgement of "Progress and Poverty," Henry George's greatest work, from 563 pages to 211, there is no excuse for any thinking person to harbor a false notion through lack of time to read for himself. This little book, published by Harcourt, Brace & Co.. which has all the charm of the unabridged edition will be mailed from this office to any address at the publisher's price of $1. Or with Tax Facts for one year at $1.25.

LVTfan here: I found a copy of that abridgment on ebay a couple of months ago.  It was done by Henry George's daughter Anna George De Mille and Louis Post, who was Secretary of Labor in Woodrow Wilson's cabinet.  It was inscribed by AGdM.  (I was the only bidder, and paid more for the shipping than for the book!)

In 1928, Dewey provided the introduction to a shorter abridgment of P&P called "Significant Paragraphs from Progress and Poverty, available online at http://www.wealthandwant.com/ (near the bottom of the page).  You might also be interested in a radio speech by Dewey, from the depths of the 1930s depression, linked higher on the same page.

Play "Brer Fox an' Brer Rabbit," a UK version of "The Landlords Game" (Monopoly)

Pursuing some leads on Lizzie Magie (see the related posts, below this one, and in the Landlords Game links at left), I came across a December, 2010, paper by Frances Hutchinson, about the British version of the Landlords Game, called Brer Fox an' Brer Rabbit.  She makes some very interesting points, and I learned some things about the games. I commend the entire paper to your attention, and am taking the liberty of posting the last third here:

Brer Fox an’ Brer Rabbit

Georgists argued that a system of land taxation could be introduced gradually, following informed public debate on the issues involved. To that end, during the early decades of the twentieth century they devised a series of hand-made games designed to portray the evils of the selfish system of monopoly land holding, with a view to introducing socially responsible reforms of land holding based upon the Georgist Single Land Tax proposals. The games, which circulated throughout the USA and UK, often under the title The Landlord’s Game, were played in three phases. Phase 1, based upon the existing laws of land ownership, finance and taxation, demonstrates the effects of unchecked greed and self-interest in patterns of monopoly capitalism. In Phases 2 and 3 the rules are altered to eliminate the ability of powerful players to benefit from their greed.

The creators of the game held a profound faith in the human capacity for action based upon reasoned argument. The games were designed to be played co-operatively, providing a focus for discussion which took place at each of the three phases of the game. Monopoly was later developed from Phase 1, where powerful, self-interested individuals reign supreme. The later two phases, which each form games in themselves, demonstrate the potential for communities to regain ecologically and socially viable forms of access to land.

Brer Fox an’ Brer Rabbit is an early version of The Landlord’s Game which circulated in the UK. After some years of research we managed to bring together a copy of the original board with a matching set of rules. Despite the title, this is not a children’s game. However, we have found that a major obstacle to the successful use of this original version of the game as a teaching aid, is the almost universal pernicious influence of the selfish, zero-sum game of Monopoly. Phase 1 does not run as smoothly as the polished version of the commercial version, and it can be difficult to shift to the different mindset envisaged in Phases 2 and 3.

The thoughtful playing of Phases 2 and 3 of the Landlord’s Game raises some veryinteresting questions, such as the relationship between the ‘real’ and the ‘financial’ values of land, traditional patterns of common management of land, and the whole question of landless waged-labour. What emerges most forcefully, however, is the role of the Banker, the mysterious figure whose presence is not explained in the Georgist literature, but who is able to pay out ‘wages’ to the players to enable them to continue to participate in the game. This brings into focus the whole question of the wage/salary-slavery system that is corporate capitalism in the world economy of the twenty-first century.

Playing the Game

Monopoly was developed from Phase 1 of The Landlord’s Game, which demonstrates the effects of a greedy selfish pattern of monopoly land-holding. The object of Monopoly is to buy, rent and sell property with sufficiently focused and ruthless skill to bankrupt the other players and thereby force them out of the game. In real life, the Robber Barons of the American Golden Age dominated steel, oil and other essential resources not by creating wealth, but by dominating the field. Mirroring assumptions of economic orthodoxy, the number of houses and hotels in Monopoly are deliberately kept scarce. The game is so designed that all cannot improve their properties equally, and collaboration is prohibited. “Monopoly models the foundation assumption of economics: the principle of scarcity. Every opportunity you act on is thereby denied to another player.”11

To play a version of The Landlord’s Game it is necessary to step back in time, to forget the rush, bustle and constant worry of the twenty-first century and take time to imagine one is alive in the idyllic years before the First World War. Although the commercially designed Monopoly can be played out in a single playing session, several leisurely sessions need to be set aside for playing The Landlord’s Game. The specific uses of the sites laid out on the board would have been familiar to the players, and would have given rise to discussion of local examples. Thus the game offers a refreshing opportunity to reflect on the purposes of the various ‘money making’ institutions on the board, including the actual money-maker, the bank itself.

Devised over a hundred years ago as a DIY exercise, boards, cards and playing pieces were normally assembled from household materials. Playing tokens were buttons, badges, charms, or anything to hand. Brer Fox an’ Brer Rabbit, produced and patented by the Newbie Games Company of Dumfries, Scotland, in 1913, has been reproduced in the attached format* so that all three phases of the game can be played. The family resemblance to Monopoly is immediately obvious. Bearing in mind the history of Monopoly just described, the leisurely playing of all three phases is an excellent consciousness-raising exercise. The later two phases, which form games in themselves, demonstrate the potential for communities to regain access to land by regaining control over all forms of economic activity, including banking. Personally, I tend to agree with Karl Marx, that “in point of theory, the man [Henry George] is a back number”. The notion that an individual should have the right to buy a piece of land simply by right of landing on it when it is free, is original to the game. Equally, the Georgist game does not raise the question of money creation, the role of finance and banking in the economy or the whole question of wage-slavery upon which the edifice of global corporate capitalism rests. But that does not prevent twenty-first century players from using the sites and situations of Brer Fox an’ Brer Rabbit to review accepted assumptions about the institutions of society which govern access to wealth, property, income and power. The game offers at least as much of interest to present-day campaigners for peace, social justice, monetary reform and political sanity as it did a century ago. We look forward to opening a dialogue with groups who have played the games successfully.

Then go here: http://douglassocialcredit.com/poeticlicence.php  to print out the rules, board, cards, and money to play this game yourself.

Lizzie Magie's 1902 commentary on The Landlords' Game, on which Monopoly is based

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) .   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."

 

What Tolstoy Taught: The Great Iniquity

In a recent column in the NYT, entitled "Description is Prescription", David Brooks made references to Tolstoy, and it sent me looking to see whether a book I remembered was available via Google Books.  The book was written in 1905 by Bolton Hall, and it is entitled "What Tolstoy Taught."  Its next-to-last chapter, "The Great Iniquity," follows.  (Below this post is the final chapter from Hall's book.)

(This history-making article, dated July, 1905, first appeared in the London Times of August 1, 1905. We give the essence of the article verbatim as it appeared in the Times, for which it was translated from the Russian by V. Tchertkoff (editor of the Free Age Press, Christchurch, Hants, England), and I. F. H. It is expressly declared to be free from copyright. — Ed.)

Russia is living through an important time destined to have enormous results. One need only for a time free oneself from the idea which has taken root amongst our intellectuals, that the work now before Russia is the introduction into our country of those same forms of political life which have been introduced into Europe and America, and are supposed to insure the liberty and welfare of all the citizens — and to simply think of what is morally wrong in our life, in order to see quite clearly that the chief evil from which the whole of the Russian people are unceasingly and cruelly suffering cannot be removed by any political reforms, just as it is not up to the present time removed by any of the political reforms of Europe and America. This evil — the fundamental evil from which the Russian people, as well as the peoples of Europe and America, are suffering — is that the majority of the people are deprived of the indisputable natural right of every man to use a portion of the land on which he was born. It is sufficient to understand all the criminality, the sinfulness of the situation in this respect, in order to understand that until this atrocity, continuously committed by the owners of the land, shall cease, no political reforms will give freedom and welfare to the people, but that, on the contrary, only the emancipation of the majority of the people from that land-slavery in which they are now held can render political reforms, not a plaything and a tool for personal aims in the hands of politicians, but the real expression of the will of the people.

The other day I was walking along the highroad to Tula. It was on the Saturday of Holy Week; the people were driving to market in lines of carts, with calves, hens, horses, cows (some of the cows were being conveyed in the carts, so starved were they). A young peasant was leading a sleek, well-fed horse to sell.

"Nice horse," said I.

"Couldn't be better," said he, thinking me a buyer. "Good for plowing and driving."

"Then why do you sell it?"

"I can't use it. I've only two allotments. I can manage them with one horse. I've kept them both over the winter, and I'm sorry enough for it. The cattle have eaten everything up, and we want money to pay the rent."

"From whom do you rent?"

"From Maria Ivanovna; thanks be to her she let us have it. Otherwise it would have been the end of us."

"What are the terms?"

"She fleeces us of fourteen roubles. But where else can we go? So we take it."

A woman passed driving along with a boy wearing a little cap. She knew me, clambered out, and offered me her boy for service. The boy is quite a tiny fellow with quick, intelligent eyes.

"He looks small, but he can do everything," she says.

"But why do you hire out such a little one?"

"Well, sir, at least it'll be one mouth less to feed. I have four besides myself, and only one allotment. God knows, we've nothing to eat. They ask for bread and I've none to give them."

With whomsoever one talks, all complain of their want and all similarly from one side or another come back to the sole reason. There is insufficient bread, and bread is insufficient because there is no land.

"What is man?" says Henry George in one of his speeches. [lvtfan note: The Crime of Poverty, 1885 -- NYC in February, per NYT article; Burlington, Iowa in April]

"In the first place, he is an animal, a land animal who cannot live without land. All that man produces comes from the land; all productive labor, in the final analysis, consists in working up land, or materials drawn from land, into such forms as fit them for the satisfaction of human wants and desires. Why, man's very body is drawn from the land. Children of the soil, we come from the land, and to the land we must return. Take away from man all that belongs to the land, and what have you but a disembodied spirit? Therefore he who holds the land on which and from which another man must live is that man's master; and the man is his slave. The man who holds the land on which I must live can command me to life or to death just as absolutely as though I were his chattel. Talk about abolishing slavery — we have not abolished slavery; we have only abolished one rude form of it, chattel slavery. There is a deeper and more insidious form, a more cursed form yet before us to abolish, in this industrial slavery that makes a man a virtual slave, while taunting him and mocking him in the name of freedom.

"Did you ever think (says Henry George in another part of the same speech) of the utter absurdity and strangeness of the fact that all over the civilized world the working classes are the poor classes? Think for a moment how it would strike a rational being who had never been on the earth before, if such an intelligence could come down, and you were to explain to him how we live on earth, how houses and food and clothing and all the many things we need were all produced by work, would he not think that the working people would be the people who lived in the finest houses and had most of everything that work produces? Yet, whether you took him to London or Paris, or New York, or even to Burlington, he would find that those called the working people were the people who lived in the poorest houses."

The same thing, I would add, takes place in a yet greater degree in the country. Idle people live in luxurious palaces, in spacious and fine abodes. The workers live in dark and dirty hovels.

"All this is strange — just think of it. We naturally despise poverty, and it is reasonable that we should. . . . Nature gives to labor, and to labor alone; there must be human work before any article of wealth can be produced; and in the natural state of things the man who toiled honestly and well would be the rich man, and he who did not work would be poor. We have so reversed the order of nature that we are accustomed to think of the working man as a poor man. . . . The primary cause of this is that we compel those who work to pay others for permission to do so. You may buy a coat, a horse, a house; there you are paying the seller for labor exerted, for something that he has produced, or that he has got from the man who did produce it; but when you pay a man for land, what are you paying him for? You are paying for something that no man has produced; you pay him for something that was here before man was, or for a value that was created, not by him individually, but by the community of which you are a part."

It is for this reason that the one who has seized the land and possesses it is rich, whereas he who cultivates it or works on its products is poor.

"We talk about over-production. How can there be such a thing as over-production while people want? All these things that are said to be over-produced are desired by many people. Why do they not get them ? They do not get them because they have not the means to buy them; not that they do not want them. Why have not they the means to buy them? They earn too little. When the great mass of men have to work for an average of $1.40 a day, it is no wonder that great quantities of goods cannot be sold.

"Now, why is it that men have to work for such low wages? Because if they were to demand higher wages there are plenty of unemployed men ready to step into their places. It is this mass of unemployed men who compel that fierce competition that drives wages down to the point of bare subsistence. Why is it that there are men who cannot get employment? Did you ever think what a strange thing it is that men cannot find employment? Adam had no difficulty in finding employment, neither had Robinson Crusoe; the finding of employment was the last thing that troubled them.

"If men cannot find an employer, why cannot they employ themselves? Simply because they are shut out from the element on which human labor can alone be exerted. Men are compelled to compete with each other for the wages of an employer, because they have been robbed of the natural opportunities of employing themselves; because they cannot find a piece of God's world on which to work without paying some other human creature for the privilege.

"Men pray to the Almighty to relieve poverty. But poverty comes not from God's laws — it is blasphemy of the worst kind to say that; it comes from man's injustice to his fellows. Supposing the Almighty were to hear the prayer, how could He carry out the request so long as His laws are what they are? Consider, the Almighty gives us nothing of the things that constitute wealth; He merely gives us the raw material, which must be utilized by men to produce wealth. Does He not give us enough of that now? How could He relieve poverty even if He were to give us more? Supposing in answer to these prayers He were to increase the power of the sun, or the virtue of the soil? Supposing He were to make plants more prolific, or animals to produce after their kind more abundantly ? Who would get the benefit of it? Take a country where land is completely monopolized, as it is in most of the civilized countries, who would get the benefit of it ? Simply the landowners. And even if God in answer to prayer were to send down out of the heavens those things that men require, who would get the benefit?

"In the Old Testament we are told that when the Israelites journeyed through the desert they were hungered, and that God sent manna down out of the heavens. There was enough for all of them, and they all took it and were relieved. But supposing that the desert had been held as private property, as the soil of Great Britain is held, as the soil even of our new States is being held; suppose that one of the Israelites had a square mile, and another one had 20 square miles, and another one had 100 square miles, and the great majority of the Israelites did not have enough to set the soles of their feet upon which they could call their own — what would become of the manna? What good would it have done to the majority? Not a whit. Though God had sent down manna enough for all, that manna would have been the property of the landholders, they would have employed some of the others perhaps to gather it up into heaps for them, and would have sold it to their hungry brethren. Consider it; this purchase and sale of manna might have gone on until the majority of Israelites had given all they had, even to the clothes off their backs. What then? Then they would not have had anything to buy manna with, and the consequences would have been that while they went hungry the manna would have lain in great heaps, and the landowners would have been complaining of the over-production of manna. There would have been a great harvest of manna and hungry people, just precisely the phenomenon that we see today.

"I do not mean to say that even after you had set right this fundamental injustice there would not be many things to do; but this I do mean to say, that our treatment of land lies at the bottom of all social questions. This I do mean to say, that, do what you please, reform as you may, you never can get rid of widespread poverty so long as the element on which and from which all men must live is made the private property of some men. It is utterly impossible. Reform government; get taxes down to the minimum; build railroads; institute cooperative stores; divide profits, if you choose, between employers and employed — and what will be the result? The result will be that the land will increase in value — that will be the result — that and nothing else. Experience shows this. Do not all improvements simply increase the value of land — the price that some must pay others for the privilege of living?"

The same, I shall add, do we unceasingly see in Russia. All landowners complain of the unprofitableness and expense of their estates, whilst the price of the land is continually rising. It cannot but rise, since the population is increasing and land is a question of life and death for this population.

And therefore, the people surrender everything they can, not only their labor, but even their lives, for the land which is being withheld from them.

There used to be cannibalism and human sacrifices; there used to be religious prostitution and the murder of weak children and of girls; there used to be bloody revenge and the slaughter of whole populations, judicial tortures, quarterings, burnings at the stake, the lash; and there have been, within our memory, "running the gauntlet" and slavery, which have also disappeared. But if we have outlived these dreadful customs and institutions, this does not prove that institutions and customs do not exist amongst us which have become as abhorrent to enlightened reason and conscience as those which have in their time been abolished and have become for us only a dreadful remembrance. The way of human perfecting is endless, and at every moment of historical life there are superstitions, deceits, pernicious and evil institutions already outlived by men and belonging to the past; there are others which appear to us in the far mists of the future; and there are some which we are now living through and whose overliving forms the object of our life. Such in our time is capital punishment and all punishment in general. Such is prostitution, such is flesh eating, such is the work of militarism, war, and such is the nearest and most obvious evil, private property in land.

The evil and injustice of private property in land have been pointed out a thousand years ago by the prophets and sages of old. Later progressive thinkers of Europe have been oftener and oftener pointing it out. With special clearness did the workers of the French Revolution do so. In latter days, owing to the increase of the population and the seizure by the rich of a great quantity of previously free land, also owing to general enlightenment and the spread of humanitarianism, this injustice has become so obvious that not only the progressive, but even the most average people cannot help seeing and feeling it. But men, especially those who profit by the advantages of landed property — the owners themselves, as well as those whose interests are connected with this institution — are so accustomed to this order of things, they have for so long profited by it, have so much depended upon it, that often they themselves do not see its injustice, and they use all possible means to conceal from themselves and others the truth which is disclosing itself more and more clearly, and to crush, extinguish, and distort it, or, if these do not succeed, to hush it up.

But what has happened? Notwithstanding that at the time of their appearance the English writings of Henry George spread very quickly in the Anglo-Saxon world, and did not fail to be appreciated to the full extent of their great merit, it very soon appeared that in England, and even in Ireland, where the crying injustice of private landed property is particularly manifest, the majority of the most influential educated people, notwithstanding the conclusiveness of Henry George's arguments and the practicability of the remedy he proposes, opposed his teaching. Radical agitators like Parnell, who at first sympathized with George's scheme, very soon shrank from it, regarding political reforms as more important. In England almost all the aristocrats were against it, also, amongst others, the famous Toynbee, Gladstone, and Herbert Spencer — that Spencer who in his "Social Statics" at first most categorically asserted the injustice of landed property, and then, renouncing this view of his, bought up the old editions of his writings in order to eliminate from them all that he had said concerning the injustice of landed property.

The chief weapon against the teaching of Henry George was that which is always used against irrefutable and self-evident truths. This method, which is still being applied in relation to George, was that of hushing up. This hushing up was effected so successfully that a member of the English Parliament, Labouchere, could publicly say, without meeting any refutation, that "he was not such a visionary as Henry George. He did not propose to take the land from the landlords and rent it out again. What he was in favor of was putting a tax on land values." That is, whilst attributing to George what he could not possibly have said, Labouchere, by way of correcting these imaginary fantasies, suggested that which Henry George did indeed say.

People do not argue with the teaching of George, they simply do not know it. And it is impossible to do otherwise with his teaching, for he who becomes acquainted with it cannot but agree.

Yet, notwithstanding all, the truth that land cannot be an object of property has become so elucidated by the very life of contemporary mankind that in order to continue to retain a way of life in which private landed property is recognized there is only one means — not to think of it, to ignore the truth, and to occupy oneself with other absorbing business. So, indeed, do the men of our time.

Political workers of Europe and America occupy themselves for the welfare of their nations in various matters: tariffs, colonies, income taxes, military and naval budgets, socialistic assemblies, unions, syndicates, the election of presidents, diplomatic connections — by anything save the one thing without which there cannot be any true improvement in the condition of the people — the reestablishment of the infringed right of all men to use the land. Although in the depth of their souls political workers of the Christian world feel — cannot but feel — that all their activity, the commercial strife with which they are occupied, as well as the military strife in which they put all their energies — can lead to nothing but a general exhaustion of the strength of nations; still they, without looking forward, give themselves up to the demand of the minute, and, as if with the one desire to forget themselves, continue to turn round and round in an enchanted circle out of which there is no issue.

However strange this temporary blindness of the political workers of Europe and America, it can be explained by the fact that in Europe and America people have already gone so far along a wrong road that the majority of their population is already torn from the land (in America it has never lived on the rural land) and lives either in factories or by hired agricultural labor, and desires and demands only one thing — the improvement of its position as hired laborers. It is therefore comprehensible that to the political workers of Europe and America — listening to the demands of the majority — it may seem that the chief means for the improvement of the position of the people consists in tariffs, trusts, and colonies, but to the Russian people in Russia, where the agricultural population composes 80 percent of the whole nation, where all this people request only one thing — that opportunity be given them to remain in this state — it would seem it should be clear that for the improvement of the position of the people something else is necessary.

The people of Europe and America are in the position of a man who has gone so far along a road which at first appeared the right one, but which the further he goes the more it removes him from his object, that he is afraid of confessing his mistake. But the Russians are yet standing before the turning of the path and can, according to the wise saying, "ask their way while yet on the road."

If Russian political workers do speak about land abuse, which they for some reason call the "agrarian" question — probably thinking that this silly word will conceal the substance of the matter — they speak of it, not in the sense that private landed property is an evil which should be abolished, but in the sense that it is necessary in some way or other, by various patchings and palliatives, to plaster up, hush up, and pass over this essential, ancient, and cruel, this obvious and crying injustice, which is awaiting its turn for abolition not only in Russia, but in the whole world.

People have driven a herd of cows, on the milk products of which they are fed, into an enclosure. The cows have eaten up and trampled the forage in the enclosure, they are hungry, they have chewed one another's tails, they low and moan, imploring to be released from the enclosure and set free in the pastures. But the very men who feed themselves on the milk of these cows have set around the enclosure plantations of mint, of plants for dyeing purposes, and of tobacco; they have cultivated flowers, laid out a racecourse, a park, and a lawn tennis ground, and they do not let out the cows lest they spoil these arrangements. But the cows bellow, get thin, and the men begin to be afraid that the cows may cease to yield milk, and they invent various means of improving the condition of these cows. They erect sheds over them, they introduce wet brushes for rubbing the cows, they gild their horns, alter the hour of milking, concern themselves with the housing and treating of invalid and old cows, they invent new and improved methods of milking, they expect that some kind of wonderfully nutritious grass they have sown in the enclosure will grow up, they argue about these and many other varied matters, but they do not, cannot — without disturbing all they have arranged around the enclosure — do the only simple thing necessary for themselves as well as for the cows, take down the fence and grant the cows their natural freedom of using in plenty the pastures surrounding them.

Acting thus, men act reasonably, but there is an explanation of their action; they are sorry for the fate of all they have arranged around the enclosure. But what shall we call those people who have set nothing around the fence, but who, out of imitation of those who do not set free their cows, owing to what they had arranged around the enclosure, also keep their cows inside the fence, and assert that they do so for the welfare of the cows themselves?

Precisely thus act those Russians, both Governmental and anti-Governmental, who arrange for the Russian people, unceasingly suffering from the want of land, every kind of European institution, forgetting and denying the chief thing: that which alone the Russian people requires — the liberation of the land from private property, the establishment of equal rights on the land for all men.

The true bread-supporters of these European parasites are the laborers they do not see in India, Africa, Australia, and partly in Russia. But it is not so for us Russians; we have no colonies where slaves invisible to ourselves feed us for our manufacturing produce. Our bread-winners, suffering, hungry, are always before our eyes, and we cannot transfer the burden of our iniquitous life to distant colonies, that slaves invisible to us should feed us. Our sins are always before us.

And behold, instead of entering into the needs of those who support us, instead of hearing their cries and endeavoring to satisfy them, we, instead of this, under pretext of serving them, also prepare, according to the European sample, socialistic organizations for the future, and in the present occupy ourselves with what amuses and distracts us, and appears to be directed to the welfare of the people out of whom we are squeezing their last strength in order to support us, their parasites.

One need only enter into the unceasing sufferings of millions of the people; the dying out from want of the aged, women, and children, and of the workers from excessive work and insufficient food — one need only enter into the servitude, the humiliations, all the useless expenditures of strength, into the deprivations, into all the horror of the needless calamities of the Russian rural population which all proceed from insufficiency of land — in order that it should become quite clear that all such measures as the abolition of censorship, of arbitrary banishment, etc., which are being striven after by the pseudo-defenders of the people, even were they to be realized, would form only the most insignificant drop in the ocean of that want from which the people are suffering.

There was a time when In the name of God and of true faith in Him men were destroyed, tortured, executed, beaten in scores and hundreds of thousands. We, from the height of our attainments, now look down upon the men who did these things.

But we are wrong. Amongst us there are many such people, the difference lies only here — that those men of old did these things then in the name of God, and of His true service, whilst now those who commit the same evil amongst us do so in the name of "the people," "for the true service of the people." And as amongst the former there were men insanely self-convinced that they knew the truth, and there were others, hypocrites, taking up their position under the pretext of serving God, and there was a crowd without consideration following the more dexterous and bold, so also now those who do evil in the name of serving the people consist of men insanely self-convinced that they alone know the truth — of hypocrites and of the crowd. Much evil have the self-proclaimed servants of God done in their time, thanks to the teaching which they called Theology, but the servants of the people, thanks to the teaching which they call Science, if they have done less evil, it is only because they have not yet had time to do it, but already on their conscience there lie rivers of blood and great divisions and exasperation amongst men.

Of all indispensable alterations of the forms of social life there is in the life of the world one which is most ripe, one without which not a single step forward in improvement in the life of men can be accomplished. The necessity of this alteration is obvious to every man who is free from preconceived theories. This alteration is not the work of Russia alone, but of the whole world. All the calamities of mankind in our time are connected with this condition.

[This is perhaps an example of Tolstoy's general statements; so broad as to seem absurd at first glance. But it is clear that every improvement in the condition of the earth, whether agricultural, mechanical, political, social, ethical, educational or even religious, must go eventually and mainly to the benefit of the owners of the earth. If, then, Tolstoy's idea is correct, that our land system is the root of our economic evils; all the "improvements" which go to make it less hideous, result in the main in strengthening the system.—Ed.]

Without religion one cannot really love men, and without loving men one cannot know what they require, and what is more, and what is less necessary for them. Only those who are not religious, and therefore do not truly love, can invent trifling, unimportant improvements in the condition of the people without seeing that chief evil from which others are suffering, and which they themselves are partly producing. Only such people can preach more or less cleverly-constructed abstract theories supposed to render the people happy in the future, and not see the sufferings the people are bearing in the present and which demand immediate and practical alleviation. As it were, a man who has deprived a hungry man of his food is giving him his counsel (and that of a very doubtful character) as to how he should get food in the future, without deeming it necessary immediately to share with him that part of his own abundance consisting of the food he has actually taken away from the man.

Fortunately, great beneficial movements in humanity are accomplished not by parasites feeding on the life-blood of the people, whatever they may call themselves — Governments, Revolutionists, or Liberals — but by religious people — that is, by people who are serious, simple, laborious, and who live not for their own profit, vanity, or ambition, and not for the attainment of external results, but for the fulfillment before God of their human vocation.

Such men, and only such, by their noiseless but resolute activity, move mankind forward. Such men will not, desiring to distinguish themselves in the eyes of others, invent this or that improvement in the condition of the people (there can be an endless number of such improvements, and they are all insignificant if the chief thing is not done), but will endeavor to live in accordance with the law of God, with conscience, and in endeavoring to live so they will naturally come across the most obvious transgression of this law, and for themselves, and for others will search for the means of freeing themselves from it.

"Great social reforms," says Mazzini, "always ve been and will be the result of great religious movements."

And such is the religious movement which is now pending for the Russian people, for all the Russian people, for the working classes deprived of land as well as, and especially for, the big, medium, and small landowners, and for all those hundreds of thousands of men who, although they do not directly possess land, yet occupy an advantageous position, thanks to the compulsory labor of the people who are deprived of land.

This sin can be undone, not by political reform, nor socialistic schemes for the future, nor by revolutions in the present, and still less by philanthropic assistance or governmental organization for the purchase and distribution of land among the peasants. Such palliative measures only distract attention from the essence of the problem and thus retard its solution.

No artificial sacrifices are necessary, no concern about the people — there is only necessary the consciousness of this sin by all those who commit or participate in it, and the desire of freeing themselves from it.

It is only necessary that the undeniable truth which the best men of the people always knew and know — that the land cannot be the exclusive property of some, and that the non-admission to the land of those who are in need of it is a sin — that this truth should become generally recognized by all men; that people should become ashamed of retaining the land from those who want to feed themselves from it; that it should become a shame in any way to participate in this retention of the land from those who need it, a shame to possess land, a shame to profit by the labor of men compelled to work only because they have been deprived of their legitimate right to the land.

Possessing hundreds, thousands, scores of thousands of acres, trading in land, profiting one way or the other by landed property, and living luxuriously, thanks to the oppression of the people, possible through this cruel and obvious injustice — to argue in various committees and assemblies about the improvement of the conditions of the peasant's life without surrendering one's own exclusively advantageous position growing from this injustice, is not only an unkind but a detestable and evil thing, equally condemnable by common sense, honesty and Christianity. It is necessary, not to invent cunning devices for the improvement of men deprived of their lawful right to the land, but to understand one's own sin in relation to them, and before all else to cease to participate in it, whatever this may cost. Only such moral activity of every man can and will contribute to the solution of the question now standing before humanity.

The land question has at the present time reached such a state of ripeness as fifty years ago was reached by the question of serfdom. Exactly the same is being repeated. As at that time men searched for the means of remedying the general uneasiness and dissatisfaction which were felt in society, and applied all kinds of external governmental means, but nothing helped nor could help whilst there remained the ripening and unsolved question of personal slavery, so also now no external measures will help or can help until the ripe question of landed property be solved. As now measures are proposed for adding slices to the peasants' land, for the purchase of land by the aid of banks, etc., so then also palliative measures were proposed and enacted, material improvements, rules about three days' labor, and so forth. Even as now the owners of land talk, about the injustice of putting a stop to their criminal ownership, so then people talked about the unlawfulness of depriving owners of their serfs. As then the Church justified the serf right, so now that which occupies the place of the Church — Science — justifies landed property. Just as then slave owners, realizing their sin more or less, endeavored in various ways without undoing it to mitigate it, and substituted the payment of a ransom by the serfs for direct compulsory work for their masters and moderated their exactions from the peasants, so also now the more sensitive landowners, feeling their guilt, endeavor to redeem it by renting their land to the peasants on more lenient conditions, by selling it through the peasant banks, by arranging schools for the people, ridiculous houses of recreation, magic-lantern lectures and theaters.

The question will be solved, not by those who will endeavor to mitigate the evil or to invent alleviations for the people or to postpone the task of the future, but by those who will understand that, however one may mitigate a wrong, it remains a wrong, and that it is senseless to invent alleviations for a man we are torturing, and that one cannot postpone when people are suffering, but should immediately take the best way of solving the difficulty and immediately apply it in practice. And the more should it be so that the method of solving the land problem has been elaborated by Henry George to such a degree of perfection that, under the existing State organization and compulsory taxation, it is impossible to invent any other better, more just, practical, and peaceful solution.

"To beat down and cover up the truth that I have tried tonight to make clear to you [said Henry George], selfishness will call on ignorance. But it has in it the germinative force of truth, and the times are ripe for it. . . . The ground is plowed; the seed is set; the good tree will grow. So little now; only the eye of faith can see it."

And I think Henry George is right, that the removal of the sin of landed property is near, that the movement called forth by Henry George was the last birth-throe, and that the birth is on the point of taking place; the liberation of men from the sufferings they have so long borne must now be realized. Besides this, I think (and I would like to contribute to this, in however small a measure) that the removal of this great universal sin — a removal which will form an epoch in the history of mankind — is to be effected precisely by the Russian Slavonian people, who are, by their spiritual and economic character, predestined for this great universal task — that the Russian people should not become proletarians in imitation of the peoples of Europe and America, but, on the contrary, that they should solve the land question at home by the abolition of landed property, and show other nations the way to a rational, free and happy life, outside industrial, factory, or capitalistic coercion and slavery — that in this lies their great historical calling.

What Tolstoy Taught: Human Rights

In a recent column in the NYT entitled "Description is Prescription", David Brooks made references to Tolstoy, and it sent me looking to see whether a book I remembered was available via Google Books.  The book was written in 1905 by Bolton Hall, and it is entitled "What Tolstoy Taught."  Its final chapter, "Human Rights," follows:

(Tolstoy proclaimed the law of love as enunciated by Christ; the political rights as enunciated by Thomas Jefferson; the economic rights as announced by Henry George: the two latter as amplifications of the first; all being essential to man's earthly welfare. Tolstoy's philosophy was progressive. At first he saw that the law of love was necessary; then he recognized the necessity of equal political rights; next he recognized that without economic justice these remedies were futile, and he accordingly embraced the philosophy of Henry George, as evidenced by the following article addressed to the Russian people.— Ed.)

A number of suggestions have been made as to how to divide, in the most just manner, all land among the workers, but of all these only the one made by the late Henry George appears to me to be practicable.

The property right, Henry George wrote in his book about the single tax, is founded not on human laws, but on the laws of God. It is undeniable and absolute, and everyone who violates It, be it an individual or a nation, commits a theft.

A man who catches a fish, who plants a tree, builds a house, constructs a machine, sews a dress or paints a picture, thereby becomes the owner of the results of his own efforts — he has the right to give them away, to sell them or to leave them to his heirs. As the land has not been created by us, and only serves as the temporary residence of changing generations of human beings, it is clear that nobody can own the exclusive right to possess land, and that the rights of all men to it are equal and inalienable.

The right to own land is limited by the equal rights of all others, and this imposes upon the temporary possessor of land the duty to remunerate society for the valuable privilege given him to use the land in his possession.

When we impose a tax upon houses, crops, or money in any form, we take from members of society something which by right belongs to them, we violate the property right and commit a theft in the name of the law; while when we impose a tax upon land we take from members of society something which does not belong to them, but to society, and which cannot be given to them except at a detriment to others. We thus violate the laws of justice when we place a tax on labor or the results of labor, and we also violate them if we do not levy a tax on land.

Let us, therefore, decide to stop levying all taxes except the tax on the value of land, regardless of the buildings erected or the improvements made on it, but only on the value which natural or social conditions give to it.

If we place this single tax on land the results will be these:

1. The tax will relieve us of the whole army of officials necessary to collect the present taxes, which will diminish the cost of government, at the same time making it more honest. It will rid us of all the taxes which lead to lying, to perjury, to frauds of all kinds. All land is visible, and cannot be hidden, and its value is fixed easier than that of any other property, and the single tax can be determined at less expense and less danger to public morals.

2. It will to a great extent increase the production of wealth, doing away with the discouraging tax upon labor and thrift, and it will make the land more accessible to those who want to work or improve, as the proprietors, who do not work themselves, but speculate in its increasing value, will find it difficult to keep up such expensive property. The tax on labor, on the other hand, leads to the accumulation of immense fortunes in a few hands, and the increasing poverty of the masses. This unjust division of wealth on one side leads to the creation of one class of people who are idle and corrupt, because they are too rich, and the creation of another class of people who are too poor, and thus doubly delays the production of wealth. This unjust division of wealth creates on one side terrible millionaires, and on the other side vagrants, beggars, thieves, gamblers and social parasites of various kinds, and necessitates an enormous expense for officials to watch these — policemen, judges, prisons and other means which society uses in self-defense.

The single tax is a remedy for all these evils.

I do not mean to say that this tax will transform human nature, for that is not within the power of man, but it will create conditions under which human nature will grow better instead of worse, as under the present conditions. It will make possible an increase of wealth, of which it is hardly possible to form an idea. It will make undeserved poverty impossible. It will do away with the demoralizing struggle for a living. It will make it possible for men to be honest, just, reasonable and noble, if they desire to be so. It will prepare the soil for the coming of the epoch of justice, abundance, peace and happiness, which Christ told His disciples of.

Let us suppose that in a certain place all land belongs to two owners — one very rich, who lives far away, and another, not rich, living and working at home — and to a hundred of small peasants owning a few acres each. Besides these, there live on that place some scores of people who own no land — mechanics, merchants, and officials.

Now let us suppose that the people of that community, having arrived at the conclusion that the land is common property, decide to dispose of the land according to their new conviction.

What would they do? Take all the land away from those who own it, and give everybody the right to take the land he desires? That could not be done, because there would be several people who would want the same ground, and this would lead to endless quarrels. To form one society and work all things in common would be difficult, because some have carts, wagons, horses and cattle, while others have none, and, besides, some people do not know how to till the soil, or are not strong enough.

To divide all the land in equal parts, according to its value, and allow one part to each is very difficult, and this would, besides, be impracticable, because the lazy and poor would lease their property to the rich for money, and these would soon again be in possession of it all.

The inhabitants of the community, therefore, decide to leave the land in the possession of those who own it, and to order each owner to pay into the common treasury money representing the revenue which had been decided on after appraising the value of the land, not according to the work or the improvements made on it, but to its quality and situation, and this money was to be divided equally among all.

But as it was difficult first to take this money from all those who held the land, and then divide it equally among all the members of the community, and as these members, besides, paid money toward the public needs — schools, fire departments, roads, etc.— and as this money was always needed, they decided to use all the money derived from those who had the use of the land, for public needs.

Having made this arrangement, the members of the community levied the tax for the use of land on the two large owners, and also on the small peasants, but no tax at all was imposed on those who held no land.

This caused the one landowner who lived far away, and who derived little income from his property, to realize that it did not pay to hold on to land thus taxed, and he gave it up. The other large owner gave up part of his land, and kept only that part which produced more than the amount of his tax. Those of the peasants who held small properties, and who had plenty of men, and not enough land, as well as some of those who held no land at all, but who desired to make a living by working the land, took up the land surrendered by its former owners.

After that all the members of the community could live on the land and make a living from it, and all land passed into the hands of or remained with those who loved to work it, and who made it produce the most. The public institutions flourished and the wealth of the community increased, for there was more money than before for public needs; and the most important fact was that this change in the ownership of land took place without any discussions, quarrels, or discord, by the voluntary surrender of the land by those who did not derive any profit from it.

This is the project of Henry George, which, if tried here, would make Russia wealthy and happy, and which is practicable all over the world.

 

The Case Plainly Stated

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?

AN ILLUSTRATION.

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?

THE REMEDY.

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.

TAXATION ABOLISHED.

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?

James Love's paragraph summary of Progress and Poverty

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.

Thy Kingdom Come!

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.