Land Value Taxation will solve many of the 21st century's most serious social, economic and environmental problems, and promote justice, fairness and sustainability. We CAN have a world in which all can prosper.
Progress and Poverty, by Henry George Here are links to online editions of George's landmark book, Progress & Poverty, including audio and a number of abridgments -- the shortest is 30 words! I commend this book to your attention, if you are concerned about economic justice, poverty, sprawl, energy use, pollution, wages, housing affordability. Its observations will change how you approach all these problems. A mind-opening experience!
Henry George: Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy This is perhaps the most important book ever written on the subjects of poverty, political economy, how we might live together in a society dedicated to the ideals Americans claim to believe are self-evident. It will provide you new lenses through which to view many of our most serious problems and how we might go about solving them: poverty, sprawl, long commutes, despoilation of the environment, housing affordability, wealth concentration, income concentration, concentration of power, low wages, etc. Read it online, or in hardcopy.
Bob Drake's abridgement of Henry George's original: Progress and Poverty: Why There Are Recessions and Poverty Amid Plenty -- And What To Do About It! This is a very readable thought-by-thought updating of Henry George's longer book, written in the language of a newsweekly. A fine way to get to know Henry George's ideas. Available online at progressandpoverty.org and http://www.henrygeorge.org/pcontents.htm
Where Else Might You Look?
Wealth and Want The URL comes from the subtitle to Progress & Poverty -- and the goal is widely shared prosperity in the 21st century. How do we get there from here? A roadmap and a reference source.
Reforming the Property Tax for the Common Good I'm a tax reform activist who seeks to promote fairness and reduce poverty. Let's start with the enabling legislation and state requirements for the property tax. There are opportunities for great good!
The rental value of land is due to our common human needs. No single individual -- the people as a whole produce that value. It grows larger as the population and its activities increase.
This natural law of rent gives the community the moral right to take all of this value which it creates.
The mistake is made of permitting a few to take this value, thus creating speculation in land, upsetting economic stability, necessitating unemployment and the recurring breakdowns in our civilization.
This fundamental wrong must be righted before wars and all injustice can be abolished.
I like his summation, in the first paragraph: "Practical Idealism."
John Dewey's Foreword to The Philosophy of Henry George by George Raymond Geiger
THE life history of Henry George is typically American even though it has few parallels in this country. There are many instances of rise from poverty and obscurity to wealth or fame or both in the realms of business and politics, and there have been many self-made thinkers in various fields. But Henry George stands almost alone in our history as an example of a man who, without a scholastic background, succeeded by sheer force of observation and thinking that were dictated by human sympathy, and who left an indelible impress on not only his own generation and country but on the world and the future. He is an outstanding example of something of which we hear a good deal, but mainly in the way of unjustified boasting, since the quality in question is more marked in talk than evident in conduct: Practical Idealism. He is an example of what may be accomplished by unswerving devotion and self-sacrifice to a dominating idea. He was, we might say, a man of a single idea, but the statement would be misleading unless we also said that he broadened this one idea until it included a vast range of social phenomena and became a comprehensive social philosophy.
Henry George is typically American not only in his career but in the practical bent of his mind, in his desire to do something about the phenomena he studied and not to be content with a theoretic study. Of course he was not unique in this respect. The same desire has been shared by many British economists. John Stuart Mill's theoretical writings were ultimately inspired by interest in social reform. But there is something distinctive in the ardent crusade which George carried on. His ideas were always of the nature of a challenge to action and a call to action. The "science" of political economy was to him a body of principles to provide the basis of policies to be executed, measures to be carried out, not just ideas to be intellectually entertained, plus a faint hope that they might sometime affect action. His ideas were intrinsically "plans of action."
Unfortunately, in some respects, the American public was practical-minded in a much narrower sense and shorter range than was Henry George himself. It is perfectly true that the culmination and indeed the meaning of his social philosophy is to be found in his proposals regarding taxation. It is also true that many persons accept and are justified in accepting his taxation scheme without having knowledge of or interest in the background of principles and aims with which this scheme was organically associated in the mind of Henry George himself. But nevertheless the connection between the theoretical part and the practical part was vital in the thought of George himself. Something vital in acquaintance with his thought is lost when the connection is broken. One may understand the plan of tax reform by itself but one comes far short in that case of understanding the idea which inspired Henry George.
In spite, therefore, of the immense circulation of George's writings, especially of Progress and Poverty (which I suppose has had a wider distribution than almost all other books on political economy put together), the full sweep of George's ideas is not at all adequately grasped by the American public, not even by that part which has experienced what we call a higher education. Henry George is one of a small number of definitely original social philosophers that the world has produced. Hence this lack of knowledge of the wider and deeper aspects of his thinking marks a great intellectual loss. In saying this, I am not speaking of acceptance of his ideas but of acquaintance with them, the kind of acquaintance that is expected as a matter of course of cultivated persons with other great social thinkers, irrespective of adoption or nonadoption of their policies.
I should hesitate to write in this way, lest I might be thought to depreciate the practical importance of his plan of social action were it not for two things. One of these things is the fact which I have already stated. His theoretical conceptions and his program of social action are so closely united that knowledge of the first will inevitably lead on to a better understanding of the second. The other reason is more immediately applicable. Actual social conditions (like those for example of the present) are bound to raise the problem of reform and revision of methods of taxation land public finance. The practical side of George's program is bound in any case to come forward for increased attention. It is impossible to conceive any scheme of permanent tax reform which does not include at least some part of George's appropriation by society for social purposes of rental value of land. For instance, we are just beginning to understand how large a part unregulated speculation has played in bringing about the present crisis. And I cannot imagine any informed student of social economy denying that land speculation is basic in the general wild orgy, or that this speculation would have been averted by social appropriation, through taxation, of rent. To a large extent, then, some knowledge of the directly practical side of George's thought is bound, in the long run, to result from the movement of social forces. A corresponding knowledge of George's theory of the importance of land -- in the broad sense in which he uses the word -- in social development, of the causes of moral progress and deterioration, cannot be secured, however, without an understanding of his underlying philosophy.
The importance of a knowledge of this underlying philosophy is urged in spite of the fact that the present writer does not believe in the conceptions of nature and natural rights which at first sight seem to be fundamental in the social philosophy of Henry George. For, as I see the matter, these conceptions are symbols, expressed in the temporary vocabulary of a certain stage of human history of a truth which can be stated in other language without any serious injury to the general philosophy implied. It has repeatedly been pointed out that the real issue in the "natural rights" conception is the relation of moral aims and criteria to legal and political phenomena. Personally, I have little difficulty in translating a considerable part of what George says on nature over into an assertion that economic phenomena, as well as legal and political, cannot be understood nor regulated apart from consideration of consequences upon human values, upon human good: that is, apart from moral considerations. The question whether a "science" of industry and finance, of wealth, or of law and the State, can exist in abstraction from ethical aims and principles is a much more fundamental one than is the adequacy of certain historical concepts of "nature" which George adopted as a means of expressing the supremacy of ethical concepts, and on this fundamental question I think George was in the right.
This statement brings me to the connection which exists between the foregoing remarks and the work of Dr. Geiger to which the remarks are introductory. In connection with every topic he discusses, Dr. Geiger makes it clear that a vital connection between ends, human values, and economic means is at the basis of George's distinctive treatment. This fact alone gives a distinctive and timely color to this book. Moreover, the significance of Dr. Geiger's treatment does not stop at this point. There is no phase of the work and the influence of Henry George which is not considered. The account of his life and development forms a personal thread which binds all the parts together. Dr. Geiger has given us a book which meets the contemporary demand for an adequate interpretation of the thought and activity of Henry George regarded as a vital whole and not as an aggregate of isolated parts. It will enable the reader to obtain a clear and comprehensive view of one of the world's great social philosophers, certainly the greatest which this country has produced.
I posted this comment elsewhere, and thought it worth sharing here:
I've not read far into the book yet -- and it is available online as a PDF file -- but by the time I was into the first chapter, it was clear that Dr. Piketty's economic education, extensive as it might be, entirely omitted the ideas of the classical economists who described a 3-factor economy: land, labor and capital. Piketty, like nearly everyone educated in economics in the past 40 to 80 years, writes as if there were only two factors -- labor and capital -- treating land as if it were a mere subset of capital, with no reason to recognize it as differentiated.
Land -- not only urban sites, but also the other things the classical economists would recognize as Land, such as water rights, oil, electromagnetic spectrum (our airwaves which we all say belong to the American people, but which are in reality owned by corporations), landing rights at busy landlocked airports, geosynchronous orbits, urban street parking, the value of dozens of other non-renewable natural resources -- is completely different in character from that which is created by labor. To fail to recognize that difference lies at the bottom of our inequality problem.
That which individuals and corporations produce is rightly individual property. That which the community and nature produce is rightly common property, belonging to all of us. Conflating Capital and Land leads us to permit the privatization of that which is rightly our common treasure.
You might be interested to know that the Landlord Game, invented by 1902, was intended to teach this concept. You have probably played Monopoly, which was based on this game, played with very different rules.
Explore the ideas of Henry George. Between 1885 and 1900 or so, everyone knew the name and many well understood his ideas. You might start with "Social Problems" or the more analytical "Progress and Poverty," or his speeches, "The Crime of Poverty," "Thou Shalt Not Steal," among others, online at http://www.wealthandwant.com. See also http://lvtfan.typepad.com.
Dr. Piketty and others whose education in economics has omitted George's ideas should not be treated as experts; they've mixed apples and oranges and not noticed that what they've created impoverishes the vast majority of us -- and enriches a few. (Parenthetically, consider who donates heavily to our universities.)
Paying taxes is rarely pleasant, but as April 15 approaches it’s worth remembering that our tax system is a progressive one and serves a little-noticed but crucial purpose: It mitigates some of the worst consequences of income inequality.
If any of us, as individuals, are unfortunate enough to have income drop significantly, the tax on that income will plummet as well — and a direct payment, or negative tax, might even be received from the government, thanks to the earned-income tax credit. In this way, the tax system can be viewed as a colossal insurance system, guarding against extreme income inequality. There are similar provisions in other countries.
But it’s also clear that while income inequality would be much worse without our current tax system, what we have isn’t nearly enough. It’s time — past time, actually — to tweak the system so that it can respond effectively if income inequality becomes more extreme.
"Respond effectively if"???
How about policies that would prevent a large portion of our currentincome inequality by either pre-collecting, for public purposes, the economic rent which rent-seekers love to capture as long as we let it hang out there, or putting a market price on privileges of various kinds -- the right to collect tolls, the right to use the airwaves, the right to string wires of various kinds along public rights-of-way, to occupy other parts of the commons and charge others to use what one puts on it. One could call it "natural public revenue."
Bob Schiller knows some of the ways people grow wealthy in their sleep, without lifting a finger. He knows about boom-bust cycles, and the economic agony they cause to ordinary human beings in our society. He chronicles, he measures, he profits from the selling of those measurements.
Probably once or twice it has passed through his mind that by some simple alterations to public policy, we could make our economy more stable, our society more just.
Perhaps he has played the game Monopoly, and maybe he knows that it was not created in the 1930s, but has its roots in The Landlord's Game, created by late 1902, to teach the ideas of Henry George, who, it is likely, was at least mentioned in his Eco 101 textbooks, though perhaps glossed over by a busy and unaware instructor.
Does he seek to reduce the income inequality by preventing it, or only collecting some piece of the privilege-payments after the fact without tweaking the system that permits them even a tiny bit?
Milton Friedman, another economic eminence, maintained that land value tax was the "least bad" tax, but never lifted his voice to promote it further than that acknowledgment (in 1968 and 2006 and perhaps in between). He likely had other kinds of interests top of mind.
Let's not just "mitigate the worst effects." Let's acquaint ourselves with the structures that create those worst effects, and destroy them! Go to the root! Be radical! Eradicate those structures!
It was Henry David Thoreau who said,
"There are a thousand hacking at the branches of evil to one who is striking at the root."
Dare Professor Schiller strike at the root? Dare he point to the root? Has he sought the root? Or is he content with hacking -- nibbling -- at branches, which doesn't help the victims a tenth as much as striking at the root?
Ironically, Professor Schiller is the "Sterling Professor of Economics" at Yale. That seat was endowed by Jack Sterling (1844-1915), co-founder of the law firm Shearman & Sterling with Thomas G. Shearman (1834-1900)*, upon his death in 1918. Shearman knew where the root was, and devoted himself to seeking its eradication. (Explore the NYT archives for references.) It is ironic that nearly 100 years later, the occupant of that seat (and many other things at Yale) is content with nibbling. But maybe it isn't surprising. Lots of alumni would not be happy to have those roots identified, and even a tenured professor could be uncomfortable being the one to call attention. They might be the ones who endow the next set of professorships, from the gains they've made based on the unjust and unwise structures their respected -- and aspiring -- professors have failed to publicly question.
Let's not "insure against inequality." (Who gets to collect that insurance, and how does it compare to theirlosses?) Let's find ways to create a level playing field on which all can prosper. Sustainable and just to all.
And let's see about making it okay for tenured professors to share those ideas with their readers and students. And more profitable than promoting structures that need to be "insured against."
What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best “risk capital” out there.
There are people working hard at showing examples of other ways to live in a functioning society that truly creates greater prosperity for all (and I don’t mean more people getting to have more stuff).
Money should be spent trying out concepts that shatter current structures and systems that have turned much of the world into one vast market. Is progress really Wi-Fi on every street corner? No. It’s when no 13-year-old girl on the planet gets sold for sex. But as long as most folks are patting themselves on the back for charitable acts, we’ve got a perpetual poverty machine.
It’s an old story; we really need a new one.
But perhaps Buffett's most important observation is this one:
"Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left."
To which I can only insert ... "and are benefiting from."
He also points out,
As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to “give back.” It’s what I would call “conscience laundering” — feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity.
But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.
I hope Mr. Buffett will take the time to read Henry George's "Progress and Poverty." He might be better able to identify the particular structures that create and maintain poverty and the concentrations of wealth, income and power. And, based on that last sentence, I think Buffett would appreciate the final section of P&P. (Bob Drake's 2006 abridgment is a fine starting place, but the unabridged is a pleasure of its own.)
And American economists — but, be it noted, economists without the gates of institutionalism — proposed thoroughgoing remedies. Chief
among these was Henry George, whose idealism was as high as his
testimony was eloquent. It was sought to cry him down as a fanatic with a
cure-all, but history will not permit his critics to reach to his
That article begins,
"The business depression points
an accusing finger at professional economists. This paper is not an
apology for the economists—quite the contrary. At the same time it is
proper to point out that when an epidemic disease attacks the community,
(a fair analogy in the physiological world) we do not upbraid the
doctors. We welcome them into our houses, place our individual sick in
their hands, and listen anxiously to their guesses at the source of
infection. We recognize that physicians are paid by individuals, and are
not conservers of the public health in the strict sense, and so we do
not hold them, even collectively, responsible for the spread of typhoid
or influenza. They are to lock the individual stable door after the
steed is stolen, and so long as they do this with reasonable quickness
and accuracy, we do not complain.
economists have been somewhat less occupied with the ills of the
individual than have doctors as a class, and yet the share of their
attention demanded by the enterpriser, the lender, the borrower, the
speculator as such, absolves them in part from the indictment of
neglecting the public interest. Until recently the forces in American
economic life have been centrifugal, and students have been invited to
become specialists. This direction of their effort was not always the
case. The profession of "Political Economy" clearly implies a concern
for public, collective problems, and it is only within the last two
generations that American economists have departed from the historical
tradition. The term "economics" in the narrow sense, and, more
explicitly, the term "business economics," indicates the drift toward
preoccupation with private economy.
Elsewhere* I found this:
Broadus Mitchell, in his book, The
World's Wealth — Its Use and Abuse, pays a high compliment to
Henry George, the Economist who first proposed the taxation of
rental value, saying that "If America were invited to contribute one
name to an international economic hall of fame, the rest of the
world would scarcely understand it if we did not nominate Henry
*Arthur Otis: Added Revenue Without Burden; I could not find the Mitchell book online.
A third tribute to Henry George from Broadus Mitchell is online at the School of Cooperative Individualism. It describes Mitchell as Associate Professor of Political Economy, Johns Hopkins University.
I AM writing these pages on the shore of Long
Island, where the Bay of New York contracts to what is
called the Narrows, nearly opposite the point where our
legalized robbers, the Custom-House officers, board incoming
steamers to ask strangers to take their first American
swear, and where, if false oaths really colored the
atmosphere the air would be bluer than is the sky on this
gracious day. I turn from my writing-machine to the window,
and drink in, with a pleasure that never seems to pall, the
"What do you see?" If in ordinary talk I were asked
this, I should of course say, "I see land and water and sky,
ships and houses, and light clouds, and the sun drawing to
its setting over the low green hills of Staten Island and
But if the question refer to the terms of political economy,
I should say, "I see land and wealth." Land, which is the
natural factor of production; and wealth, which is the
natural factor so changed by the exertion of the human
factor, labor, as to fit it for the satisfaction of human
desires. For water and clouds, sky and sun, and the stars
that will appear when the sun is sunk, are, in the
terminology of political economy, as much land as is the dry
surface of the earth to which we narrow the meaning of the
word in ordinary talk. And the window through which I look;
the flowers in the garden; the planted trees of the orchard;
the cow that is browsing beneath them; the Shore Road under
the window; the vessels that lie at anchor near the bank,
and the little pier that juts out from it; the
trans-Atlantic liner steaming through the channel; the
crowded pleasure-steamers passing by; the puffing tug with
its line of mud-scows; the fort and dwellings on the
opposite side of the Narrows; the lighthouse that will soon
begin to cast its far-gleaming eye from Sandy Hook; the big
wooden elephant of Coney Island; and the graceful sweep of
the Brooklyn Bridge, that may be discovered from a little
higher up; all alike fall into the economic term wealth —
land modified by labor so as to afford satisfaction to human
desires. All in this panorama that was before man came here,
and would remain were he to go, belongs to the economic
category land; while all that has been produced by labor
belongs to the economic category wealth, so long as it
retains its quality of ministering to human desire.
But on the hither shore, in view from the window, is a
little rectangular piece of dry surface, evidently reclaimed
from the line of water by filling in with rocks and earth.
What is that? In ordinary speech it is land, as
distinguished from water, and I should intelligibly indicate
its origin by speaking of it as "made land." But in the
categories of political economy there is no place for such a
term as "made land." For the term land refers only and
exclusively to productive powers derived wholly from nature
and not at all from industry, and whatever is, and in so far
as it is, derived from land by the exertion
of labor, is wealth. This bit of dry surface
raised above the level of the water by filling in stones and
soil, is, in the economic category, not land but wealth. It
has land below it and around it, and the material of which
it is composed has been drawn from land; but in itself it
is, in the proper speech of political economy, wealth; just
as truly as the ships I behold are not land but wealth,
though they too have land below them and around them and are
composed of material drawn from land.
THAT land is only a passive factor in
production must be carefully kept in mind. . . . Land cannot
act, it can only be acted upon. . . . Nor is this principle
changed or avoided when we use the word land as expressive
of the people who own land. . . .
That the persons whom we call landowners may contribute
their labor or their capital to production is of course
true, but that they should contribute to production as
landowners, and by virtue of that ownership, is as
ridiculously impossible as that the belief of a lunatic in
his ownership of the moon should be the cause of her
THE power to reason correctly on general
subjects is not to be learned in schools, nor does it come
with special knowledge. It results from care in separating,
from caution in combining, from the habit of asking
ourselves the meaning of the words we use and making sure of
one step before building another on it — and above all, from
loyalty to truth.
I AM convinced that we make a great mistake in
depriving one sex of voice in public matters, and that we
could in no way so increase the attention, the intelligence
and the devotion which may be brought to the solution of
social problems as by enfranchising our women. Even if in a
ruder state of society the intelligence of one sex suffices
for the management of common interests, the vastly more
intricate, more delicate and more important questions which
the progress of civilization makes of public moment, require
the intelligence of women as of men, and that we never can
obtain until we interest them in public affairs. And I have
come to believe that very much of the inattention, the
flippancy, the want of conscience, which we see manifested
in regard to public matters of the greatest moment, arises
from the fact that we debar our women from taking their
proper part in these matters. Nothing will fully interest
men unless it also interests women. There are those who say
that women are less intelligent than men; but who will say
that they are less influential?
SOCIAL reform is not to be secured by noise
and shouting; by complaints and denunciation; by the
formation of parties, or the making of revolutions; but by
the awakening of thought and the progress of ideas. Until
there be correct thought, there cannot be right action; and
when there is correct thought, right action will follow.
Power is always in the hands of the masses of men. What
oppresses the masses is their own ignorance, their own
WE may be wise to distrust our knowledge; and, unless we have tested them, to distrust what we may call our reasonings; but never to distrust reason itself. . . . That the powers with which the human reason must work are limited and are subject to faults and failures, our reason itself teaches us as soon as it begins to examine what we find around us and to endeavor to look in upon our own consciousness. But human reason is the only reason that men can have, and to assume that in so far as it can see clearly it does not see truly, is in the man who does it not only to assume the possession of a superior to human reason, but it is to deny the validity of all thought and to reduce the mental world to chaos.
We are laying the foundations in this state for a greater
distinction of classes than exists in any state of the Union at the
present day — as great as that which exists in England, where one man
rolls in wealth and another can scarcely keep body and soul
together. We are not much over twenty years old, and have in this
great empire of our own hardly half a million people. Yet, there is
already one man among us who is worth nearly ten million dollars,
and quite a number who are worth from one to seven, while the best
part of our land is divided off into estates, which in a little
while, when population becomes denser, will make their owners as
rich as the Duke of Argyll, or the Marquis of Bute.
There is a constantly increasing tendency to the concentration of
wealth. The greater the fortune, the more rapidly it grows; and
though the people who hold these great aggregations of money may be
constantly changing, as they are changing in England, there will
constantly remain the distinction between the very rich and the very
poor. These two classes are the correlatives of each other; one man
cannot become enormously rich without other men becoming
proportionately poor. If not for our own sakes, at least for the
sake of our children, is it not time for us to stop and ask what is
the cause of this tendency of property to accumulate in a few hands? There is
certainly nothing in the laws of Nature which requires the giving to
one man of as much as can be had by ten thousand of his fellows.
-- Henry George, March 17, 1873, in the (San Francisco) Daily Evening Post, quoted by Kenneth Wenzer in Henry George: Collected Journalistic Writings, Volume 1, pp. 69-70
FIVE centuries ago the wealth-producing power of England, man for man, was small indeed compared with what it is now. Not merely were all the great inventions and discoveries which since the Introduction of steam have revolutionized mechanical industry then undreamed of, but even agriculture was far ruder and less productive. Artificial grasses had not been discovered. The potato, the carrot, the turnip, the beet, and many other plants and vegetables which the farmer now finds most prolific, had not been introduced. The advantages which ensue from rotation of crops were unknown. Agricultural implements consisted of the spade, the sickle, the flail, the rude plow and the harrow. Cattle had not been bred to more than one-half the size they average now, and sheep did not yield half the fleece. Roads, where there were roads, were extremely bad, wheel vehicles scarce and rude, and places a hundred miles from each other were, in difficulties of transportation, practically as far apart as London and Hong Kong, or San Francisco and New York, are now.
IF it were possible to express in figures the direct pecuniary loss which society suffers from the social mal-adjustments which condemn large classes to poverty and vice, the estimate would be appalling. England maintains over a million paupers on official charity; the city of New York alone spends over seven million dollars a year in a similar way. But what is spent from public funds, what is spent by charitable societies, and what is spent in individual charity, would, if aggregated, be but the first and smallest item in the account. The potential earnings of the labor thus going to waste, the cost of the reckless, improvident and idle habits thus generated, the pecuniary loss (to consider nothing more) suggested by the appalling statistics of mortality, and especially infant mortality, among the poorer classes; the waste indicated by the gin palaces or low groggeries which increase as poverty deepens; the damage done by the vermin of society that are bred of poverty and destitution — the thieves, prostitutes, beggars, and tramps; the cost of guarding society against them, are all items in the sum which the present unjust and unequal distribution of wealth takes from the aggregate which, with present means of production, society might enjoy. — Progress & Poverty — Book IX, Chapter 2: Effects of the Remedy, upon distribution and thence on production
see the corresponding passage in Drake's abridgment of P&P
THREE thousand years of advance, and still the moan goes up, "They have made our lives bitter with hard bondage, in mortar and in brick, and in all manner of service!" Three thousand years of advance! and the piteous voices of little children are in the moan. We progress and we progress; we girdle continents with iron roads and knit cities together with the mesh of telegraph wires; each day brings some new invention; each year marks a fresh advance — the power of production increased, and the avenues of exchange cleared and broadened. Yet the complaint of "hard times" is louder and louder; everywhere are men harassed by care, and haunted by the fear of want. With swift, steady strides and prodigious leaps, the power of human hands to satisfy human wants advances and advances, is multiplied and multiplied. Yet the struggle for mere existence is more and more intense, and human labor is becoming the cheapest of commodities. Beside glutted warehouses human beings grow faint with hunger and shiver with cold; under the shadow of churches festers the vice that is born of wants.
COULD a man of a century ago* — a Franklin or a Priestley — have seen, in a vision of the future, the steamship taking the place of the sailing vessel, the railroad train of the wagon, the reaping machine of the scythe, the threshing machine of the flail; could he have heard the throb of the engines that in obedience to human will, and for the satisfaction of human desire, exert a power greater than that of all the men and all the beasts of burden of the earth combined; could he have seen the forest tree transformed into finished lumber into doors, sashes, blinds, boxes or barrels, with hardly the touch of a human hand; the great workshops where boots and shoes are turned out by the case with less labor than the old-fashioned cobbler could have put on a sole; the factories where, under the eye of a girl, cotton becomes cloth faster than hundreds of stalwart weavers could have turned it out with their hand-looms; could he have seen steam hammers shaping mammoth shafts and mighty anchors, and delicate machinery making tiny watches; the diamond drill cutting through the heart of the rocks, and coal oil sparing the whale; could he have realized the enormous saving of labor resulting from improved facilities of exchange and communication — sheep killed in Australia eaten fresh in England, and the order given by the London banker in the afternoon executed in San Francisco in the morning of the same day; could he have conceived of the hundred thousand improvements which these only suggest, what would he have inferred as to the social condition of mankind?
It would not have seemed like an inference; further than the vision went, it would have seemed as though he saw, and his heart would have leaped and his nerves would have thrilled, as one who from a height beholds just ahead of the thirst-stricken caravan the living gleam of rustling woods and the glint of laughing waters. Plainly, in the sight of the imagination, he would have beheld these new forces elevating society from its very foundations, lifting the very poorest above the possibility of want, exempting the very lowest from anxiety for the material needs of life; he would have seen these slaves of the lamp of knowledge taking on themselves the traditional curse, these muscles of iron and sinews of steel making the poorest laborer's life a holiday, in which every high quality and noble impulse could have scope to grow. And out of these bounteous material conditions he would have seen arising, as necessary sequences, moral conditions realizing the golden age of which mankind have always dreamed. Youth no longer stunted and starved; age no longer harried by avarice; the child at play with the tiger; the man with the muck-rake drinking in the glory of the stars! Foul things fled, fierce things tame; discord turned to harmony! For how could there be greed where all had enough? How could the vice, the crime, the ignorance, the brutality, that spring from poverty and the fear of poverty, exist where poverty had vanished? Who should crouch where all were freemen, who oppress where all were peers?
Long before I became interested in Henry George's ideas, I had been nudged in their direction by 3 very enthusiastic grandparents. I didn't find the time to read Progress and Poverty, despite receiving lovingly inscribed copies at several milestones in my young years. But somewhere along the way, I acquired a modern reissue of a 1912 book entitled "Gems from George." One of its beauties was that it could be read in short sections; another was that the headings on each page telegraphed the subject area. I can't replicate the latter here, but want to share the gems. I'll post one a day. Today, I'd share Bob Drake's abridgment of P&P; its chapters are shorter, and one can digest them. The Gems, however, come from all George's books, and some of his speeches and articles.
I stumbled across an excerpt from this in The American Cooperator, and when I couldn't find the material in any of George's other books, I went looking for the source, an 1887 book with chapters by 16 authors.
Enjoy! (It prints out as about 9 pages, if you're so inclined)
THE HISTORY, PURPOSE AND
POSSIBILITIES OF LABOR ORGANIZATIONS
IN EUROPE AND AMERICA; GUILDS, TRADES-
UNIONS, AND KNIGHTS OF LABOR; WAGES AND PROFITS;
HOURS OF LABOR; FUNCTIONS OF CAPITAL; CHINESE LABOR:
COMPETITION; ARBITRATION; PROFIT-SHARING AND
CO-OPERATION; PRINCIPLES OF THE KNIGHTS OF
LABOR; MORAL AND EDUCATIONAL AS-
PECTS OF THE LABOR QUESTION.
EDITED BY GEORGE E. McNEILL,
First Deputy of Mass. Bureau of Statistics of Labor; Sec.-Treas. of D. A. 30, Knights of Labor.
ASSOCIATE AUTHORS: TERENCE V. POWDERLY, G. M. W., K. of L.; DR. EDMUND J. JAMES, University of Pennsylvania; HON. JOHN J. O'NEILL, of Missouri;
HON. J. M. FARQUHAR, of New York; HON. ROBERT HOWARD, of Massachusetts; HENRY GEORGE, of New York;
ADOLPH STRASSER, Pres. Cigar Makers' Union; JOHN JARRETT, of
Pennsylvania; REV. R. HEBER NEWTON, of New York; F K. FOSTER, of
Massachusetts; P. M. ARTHUR, Chief Engineer Locomotive Brotherhood; W.
W. STONE and W. W. MORROW, of California; FRANKLIN H. GIDDINGS,
"Springfield Union"; JOHN McBRIDE, Secretary Coal Miners' Union;
D.J.O'DONOGHUE, of Toronto, Canada; P. J. McGUIRE, Secretary Carpenters'
NEW YORK: THE M. W. HAZEN CO.
Copyright 1886, by
A M. BRIDGMAN & CO.
CHAPTER XXIII. THE LAND QUESTION.
MAGNITUDE OF THE QUESTION — FIRST PRINCIPLES — THE
LAND-OWNER THE ABSOLUTE MASTER OF MEN WHO MUST LIVE ON HIS LAND — THE
ORDER OF NATURE INVERTED — EQUAL RIGHTS TO THE USE OF THE EARTH —
SELFISHNESS, THE EVIL GENIUS OF MAN — THE IRISH PEOPLE FORCED TO BEG
PERMISSION TO TILL THE SOIL — APPROPRIATION OF THE CHURCH-LANDS — LAND
IN ITSELF HAS NO VALUE — THE GREAT CAUSE OF THE UNEQUAL DISTRIBUTION OF
WEALTH — NO HOPE FOR THE LABORER, SO LONG AS PRIVATE PROPERTY IN LAND
EXISTS — NOTHING MYSTERIOUS ABOUT THE LABOR QUESTION — THE DIFFICULTY IN
FINDING EMPLOYMENT — NATURE OFFERS FREELY TO LABOR — NATURAL MEANS OF
EMPLOYMENT MONOPOLIZED — SPECULATION IN THE BOUNTIES OF NATURE.
BENEATH all the great social questions of our time lies one of primary
and universal importance, the question of the rights of men to the use
of the earth.
The magnitude of the pecuniary interests involved, the fact that the
influential classes in all communities where private property in land
exists are interested in its maintenance, lead to a disposition to
ignore or belittle the land question: but it is impossible to give any
satisfactory explanation of the most important social phenomena without
reference to it; and the growing unrest of the masses of all civilized
countries, under conditions which they feel to be galling and unjust,
must at length lead them, as the only way of securing the rights of
labor, to turn to the land question.
To see that the land question does involve the problem of the equitable
distribution of wealth; that it lies at the root of all the vexed social
questions of our time, and is, indeed, but another name for the great
labor question in all its phases, it is only needful to revert to first
principles, and to consider the relations between men and the planet
We find ourselves on the surface of a sphere, circling through
immeasurable space. Beneath our feet, the diameter of the planet extends
for eight thousand miles; above our heads night reveals countless
points of light, which science tells us are suns, that blaze billions of
miles away. In this inconceivably vast universe, we are confined to the
surface of our sphere, as the mariner in mid-ocean is confined to the
deck of his ship. We are limited to that line where the exterior of the
planet meets the atmospheric envelope that surrounds it. We may look
beyond, but cannot pass. We are not denizens of one element, like the
fish; but while our bodies must be upheld by one element, they must be
laved in another. We live on the earth, and in the air. In the search
for minerals men are able to descend for a few thousand feet into the
earth's crust, provided communication with the surface be kept open, and
air thus supplied; and in balloons men have ascended to like distances
above the surface; but on a globe of thirty-five feet diameter, this
range would be represented by the thickness of a sheet of paper. And
though it is thus possible for man to ascend for a few thousand feet
above the surface, or to descend for a few thousand feet below it, it is
only on the surface of the earth that he can habitually live and supply
his wants; nor can he do this on all parts of the surface of the globe,
but only on that smaller part, which we call land, as distinguished
from the water, while considerable parts even of the land are
uninhabitable by him.
By constructing vessels of materials obtained from land, and
provisioning them with the produce of land, it is true that man is able
to traverse the fluid-surface of the globe; yet he is none the less
dependent upon land. If the land of the globe were again to be
submerged, human life could not long be maintained on the best-appointed
Man, in short, is a land-animal. Physically considered, he is as much a
product of land as is the tree. His body, composed of materials drawn
from land, can only be maintained by nutriment furnished by land; and
all the processes by which he secures food, clothing and shelter consist
but in the working up of land or the products of land. Labor is
possible only on condition of access to land, and all human production
is but the union of land and labor, the transportation or transformation
of previously existing matter into places or forms suited to the
satisfaction of man's needs.
Land, being thus indispensable to man, the most important of social
adjustments is that which fixes the relations between men with regard to
that element. Where all are accorded equal rights to the use of the
earth, no one needs ask another to give him employment, and no one can
stand in fear of being deprived of the opportunity to make, a living. In
such a community, there could be no "labor question." There could be
neither degrading poverty nor demoralizing wealth. And the personal
independence arising from such a condition of equality, in respect to
the ability to get a living, must give character to all social and
On the other hand, inequality of privilege in the use of the earth must
beget inequality of wealth and power, must divide men into those who can
command and those who are forced to serve. The rewards which nature
yields to labor no longer go to the laborers in proportion to industry
and skill; but a privileged class are enabled to live without labor by
compelling a disinherited class to give up some part of their earnings
for permission to live and work. Thus the order of nature is inverted,
those who do no work become rich, and "workingman" becomes synonymous,
with "poor man." Material progress tends to monstrous wealth on one
side, and abject poverty on the other; and society is differentiated
into masters and servants, rulers and ruled.
If one man were permitted to claim the land of the world as his
individual property, he would be the absolute master of all humanity.
All the rest of mankind could live only by his permission, and under
such conditions as he chose to prescribe. So, if one man be permitted to
treat as his own the land of any country, he becomes the absolute
sovereign of its people. Or, if the land of a country be made the
property of a class, a ruling aristocracy is created, who soon begin to
regard themselves, and to be regarded, as of nobler blood and superior
rights. That "God will think twice before he damns people of quality,"
is the natural feeling of those who are taught to believe that the land
on which all must live is legitimately their private property.
recent migration of thousands of American farmers to the cold and
comparatively uninviting regions of western Canada has not been thru any
lack of opportunity, in the more attractive regions of Minnesota and
neighboring states, created by natural causes. Whatever lack of
opportunity or ''room" exists, anywhere south of the boundary line, is
the result of conditions wholly artificial in their origin. Chief among
these is the tying up of large bodies of the best lands in the hands of
speculators who are holding them for a rise. Take a trip on almost any
railroad leading out of St. Paul and all along its line it will be found
that the unimproved land exceeds in acreage the amount reduced to
cultivation. In great numbers of instances there has been no thought of
improving it by its present owners. They have bought it on speculation,
and when they sell, it is an even chance that the transfer will be to
some other speculator. Drive the speculator out of the field and the
vacant stretches between villages will soon be occupied by farms. At
present, even in the wonderfully fertile and productive region of the
Red River of the North, a vast acreage is unoccupied — held on
the Western farmers and legislators had formed a truer appreciation of
the fundamental teachings of Henry George in that remarkable book,
"Progress and Poverty," they would long ago have found a remedy for
conditions which prevent the settlement of lands in their own
neighborhoods, condemn the larger part of the fertile area in hundreds
of counties to unproductive idleness, curtail the revenues of the stale,
and double the burdens of the farmers who are really building up the
country. That remedy is the taxation of unproductive at the same rate as
productive land; the release from taxation of the farmer's house and
barn and crops and cattle, and the laying of the entire tax on the land —
including in the term "land" all franchises and monopolistic uses of
natural opportunities, like water power, etc. If the land speculator had
to pay the same tax, on every uncultivated acre, that the farmer pays
on the cultivated — the amount being increased by the abolition of the
personal property tax — he would soon be compelled to "sell out " at
such figures as would remove all temptation for the homeseeker to travel
to Canada or elsewhere in search of cheap land. That the clear, shining
virtue of Mr George's proposition should have been obscured by its
forced and unnecessary connection with the questions of individual land
owning and "free trade" is one of the misfortunes of the century.
Divested of this connection, it affords the most direct and equitable
solution yet suggested for the multiform problems involved in the right
adjustment of taxation.
no class of reformers do we find more clear thinking or a sounder
political economy than among the "single-taxers." Following the writings
of the late Henry George there is a considerable and important
literature upon this subject. Land monopoly and speculation should be
stopped. Labor should not be taxed. The resources of nature should be
made to minister equitably to the whole people. Now the weakest pay the
most tax. It should be the strongest and they whom the government most
A Baltimore Instance
single tax man of Baltimore, Mr John Salmon, expresses no little
surprise that Senator Hanna's candidate for governor of Ohio supposes
that the single tax has been a disastrous failure wherever tried. Of Mr
Herrick and his notion Mr Salmon writes: This stamps him as being a
twisted thinker and a loose observer. The single tax is in operation all
over the United States, flowing into the pockets of private
individuals, which is what single taxers object to. Here in Baltimore
more than in any other section of the country, it is strongly apparent.
We have the ground rent system in operation, 90 percent of the real
estate being held on leaseholds. The custom is an old English one
grafted on the Maryland colonies by Lord Baltimore and his English
compeers, and it has grown and flourished like a green bay tree. When
one buys a home here it is in nine cases out of ten subject to a ground
rent. These ground rents are dealt in as a form of investment the same
as a mortgage or any other form of investment; but the point to observe
is that they are a single tax, pure and simple, the price paid for the
use of the ground per se and for ground only.
last assessment separated the value of the land from the value of
improvements, and it is done every day in our community. Baltimore has
more houses per capita than any city in the country, due to the ground
rent system; and a house costing $1,200 to build is very often sold for
$800 or $900 in order to create a ground rent ranging from three dollars
a front foot to $20 and $40 a front foot. To explain more fully: Bonus
buildings are run up on plats of ground split up into lots of 15x90, and
a ground rent say of $6 per front foot is put on the lot, making $90 a
year ground rent, which the buyer agrees to pay, and in his ground rent
is a clause that he will also pay all taxes. This $90 is essentially a
single tax. The agreement to pay it is exactly the same kind of a
contract that is in vogue in Fairhope, Ala. With this extremely
important exception, that whereas we in Baltimore bind ourselves to pay
all the taxes, in Fairhope the company or lessor, agrees to pay all
taxes. Talk of its being a disastrous failure! Not on your life. Ground
rents are as scarce as hen's teeth, and can only be bought on a three
percent basis. They command as good a price as government bonds, and it
is estimated that $14,000,000 at least is raised in Baltimore alone from
this source — nearly twice as much as the city and state taxes amount
to. And what is this tax of $14,000,000 paid for? Why, merely for the
privilege of living in the city of Baltimore. That's all the payers get
for it. And the only kick we've got coming is that the private
individuals get that money instead of the city and state.
-- found in "The American Cooperator" (1903); "The Public" was a weekly newspaper, out of Chicago, edited by Louis F. Post, who went on to serve in Woodrow Wilson's administration.
I always thought of "Stir-Up Sunday" as the reminder that it was time to bake fruitcake, but will now probably think of this passage:
The Church Reformer (London) says: "On Sunday next before Advent the priest before every altar in England prayed for a divine excitement - 'Stir up, O Lord, we beseech Thee, the wills of thy faithful people.' Men are beginning to see what is at the bottom of our misery. Henry George's enormous vote in New York has compelled attention to the fact that whether or no relief works and eight-hour bills and free dinners are to come, nothing can do any good permanently while land, the mother, is divorced from labor, the father of all wealth. If then God's servants who did the church's work on that Sunday in Trafalgar Square, in creating a divine excitement, in asking the question how the hungry are to be fed, and in protesting against the oppression of the poorest laborer, are to continue their work to completion, they must go boldly for nothing less than the full restoration to the people of the whole of the value they give to the land; they may nationalize machinery, capital, what they like, but until they have nationalized the land the poverty of the workers will remain."
Pigou, a key bridge figure in the history of his field, was one of the earliest classical economists to notice that markets do not always produce the best possible social outcomes. The pollution generated by a factory imposes costs on those who live downstream or in the path of its airborne emissions. The risks assumed by banks leading up to the recent financial crisis imposed costs on just about everybody. Market transactions often generate what economists call “externalities” — side effects, sometimes positive but often negative, that affect people who do not participate in the transaction.
Pigou, having recognized the problem, was the first to propose a solution. Society should tax the negative externalities and subsidize the positive ones. This simple notion — if you want less of something, tax it — is why his ideas periodically bubble up in the service of combating a recognizable cost to society, like pollution. We think that his approach offers an answer to another great problem of our time: inequality.
Does the extreme degree of inequality in America today really create, as Pigou would put it, negative externalities? Does the fact that hedge-fund manager Mr. Jones rakes in 100 or 1,000 times what office manager Mrs. Smith earns impose costs on everybody else? Plenty of Americans think not. Defenders of our skewed income distribution point out that a free-enterprise system requires some inequality. Unequal rewards give people an incentive to work hard and acquire new skills. They encourage inventors to invent, entrepreneurs to start companies, investors to take risks. It’s fine in this view that some people get astronomically rich. As Mitt Romney likes to say, “I’m not going to apologize for being successful.”
On the other side, many of us have a gut feeling that inequality has gone too far. Our times are reminiscent of the Gilded Age’s worst excesses. Hence the popularity of the Occupy Wall Street movement’s slogan, “We are the 99 percent.”
LVTfan here: Wouldn't it be better to prevent the inequality by such measures as treating the natural creation as our common treasure, instead of permitting its privatization and then taxing back what is taken? Treating the natural creation, and that which the community creates by its presence and its investment in public goods -- schools, roads, libraries, etc. -- as our COMMON treasure would create equal opportunity for all, a much better idea than permitting some to capture it and then taxing some of their booty back after the fact. When we let some reap what others sow, and then take back a share after the fact, we're still permitting them to reap which deprives the sowers of that right. Whether it be nature doing the sowing, or the community as a whole, no good can come of permitting the privatization of that. Henry George, in "Progress and Poverty" and "Social Problems" showed the logical, efficient, just way to do better.
Came across this in a book of editorials from the Hearst newspapers, circa 1914. It is entitled "William Henry Channing's Symphony."
WILLIAM HENRY CHANNING'S SYMPHONY
To live content with small means; to seek elegance rather
than luxury, and refinement rather than fashion; to be worthy, not
respectable, and wealthy, not rich; to listen to stars and birds, babes
and sages, with open heart; to study hard; to think quietly, act
frankly, talk gently, await occasions, hurry never; in a word, to let
the spiritual, unbidden and unconscious, grow up through the common —
this is my symphony.
William Henry Channing.
To live content with small means.
This means to realize to the full the possibilities of life. Contentment
means absence of worry. It is only when free from worry that the brain
can act normally, up to its highest standard. The man content with small
means does his best work, devotes his energies to that which is worth
while, and not to acquiring that which has no value.
To seek elegance rather than luxury.
The difference between elegance and luxury is the difference between the
thin, graceful deer, browsing on the scanty but sufficient forest
pasture, and the fat swine revelling in plentiful garbage.
Refinement rather than fashion.
The difference between refinement and fashion is the difference between
brains and clothing, the difference between an Emerson or a Huxley and a
Beau Brummel or other worthless but elaborately decked carcass.
To be worthy, not respectable.
In other words, to be like Henry George, and not like the owner of a trust.
Wealthy, not rich.
The man who has a good wife and good children, enough to take care of
them, but not enough to spoil them, is wealthy. He is happier than the
man who is rich enough to be worried, rich enough to make it certain
that his children will be ruined by extravagance, and perhaps live to be
ashamed of him.
To listen to stars and birds, babes and sages, with open heart.
This means to enjoy the noblest gifts that God has given to man. He is
happy who takes more pleasure in a beautiful sunset than in the sight of
a flunky with powdered hair, artificial calves and lofty manners,
handing him something indigestible on a plate of gold.
To study hard; to think quietly, act frankly, talk gently.
To exercise in this way the brain that is given to us is to lead the
life of a man, a life of self-control, a life that is worth while, that
leads to something and helps forward the improvement of the race.
In the words which we have quoted at the top of this column William Henry Channing has given a recipe for wise living.
... many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer, or significantly decrease their expenditures in retirement if they hope to make ends meet.
The Employee Benefits Research Institute recently published an analysis of 2010 Survey of Consumer Finances data. It demonstrates how few people have the traditional defined-benefit retirement plans, and the account balances people of various demographics have in their individually-directed retirement accounts.
Here are some statistics worth considering as we think about the effects of a system which permits a few of us to capture a large share of the nation's net worth and a large share of its income, and to unduly influence our elections with advertising which works to conceal and reinforce the structures of that system:
38% of all families -- of all ages -- had a family member with a retirement plan. [Figure 2]
of those 38%, 18% had only a defined benefit plan; 61% had only a defined contribution plan; 21% had both. 82% had a 401(k) type plan, and of that 82%, 22% also had a defined benefit plan
Among those families whose head was 55-64, 43% had a member with a retirement plan; among those 45-54, 53% did.
Interestingly, the top 75% of the net worth spectrum all had rates in the 41% to 46% range; in the bottom 25%, only 21%.
Among families whose head was under 65 and working, 52% had a member participating in a retirement plan [Figure 3].
Among households with income abov e $100,000, 76% had retirement plans; in the $50,000 to $100,000 income range, 64%; in the lower income groups, the rate ranged from 44% down to 9%
In the 55-64 age group, 59% had a retirement plan; in the 45-54 group, 61%.
Within this working-age universe, similar trends held: the top 50% had roughly 61-67% availability of employment-related retirement plans; for the next 25%, only 53%; for the bottom 25% of working families, only 29%.
IRAs and Keogh plans: 28% had one or both; median value, $40,000 (up from $34,574 in 2007). Among those 55-64, 41% had one or both; median value $60,000 (down from $68,101); among those 45-54, 29% had one or both; median value $40,000, up from $37,717. [Figure 5]
Even among those in the top 10% of the net worth spectrum, only 77% had IRA or Keogh accounts, median value $200,,000, up from $142,487 in 2007; in the next 15% of the net worth spectrum, median value was $60,000.
Of all families, 64% had some sort of retirement account from a current or previous employer (down from 66% in 2007)
Retirement assets in Defined Contribution plans and IRAs typically [that is, at the median] represent 61% to 66% of total financial assets, which is to say that most have less in mutual funds, stocks, checking and other accounts than they do in their retirement accounts. [Figure 8]
Only in the top 10% do retirement assets represent less than half of financial assets.
As is typical of median/average ratios, average holdings are considerably higher -- that is, the holdings of the top few are huge, and most of us are below average. The average balance is $173,232; in the top 10% of the net worth spectrum, average balances are $519,034. For the next 15% of us, the average balance is 147,061 -- well below the average of all of us! [Figure 9] Recall from Figure 6 that 64% of us have such a plan; the other 36% have no balance at all (and likely a significant percentage have very small account balances).
For those in the 65-74 age group, the average balance is $324,199; for those in the 55-64 group, the average balance is $297,903.
For those in the top 10%, average account balance is $519,034. One might reasonably guess that the top 5% have the lion's share of this.
It might be worth noting that a 70 year old must withdraw at least 1/27 of his IRA per year. Based on that 65-74 age group average balance, that's $12,000 per year. (Another rule of thumb says that if one only withdraws 3% per year, one's account should last forever. That would be $9,725 per year, for that "average" -- not median -- family in the 65-74 age group.
Enough said. Time to circle back to the study's conclusion:
... many Americans are facing the likelihood of not having sufficient income in retirement unless they increase their savings, work longer, or significantly decrease their expenditures in retirement if they hope to make ends meet.
What public policy reforms might one suggest based on these data points?
Find a way to raise wages for ordinary workers
Find a way to lower the cost of living for ordinary workers and retirees
Find a way to reduce the sum of the taxes we pay and the costs of housing without reducing the public goods which those taxes provide (unless it is by reducing the demand for social safety net
If you have other suggestions, I'd like to hear them.
But the reason for this blog is that I believe I have found the public policy reform which would accomplish these goals, in collecting the lion's share of the annual rental value of our land, and in collecting for the commons certain other kinds of natural public revenue which our current system permits to accrue to individuals and corporations. I didn't invent it. Henry George is the clearest exponent of it, but not the first or last. Is it perfect? No, but it is vastly superior to what we've got now, and I believe it is consistent with the ideals to which Americans pay the most honor.
The game’s true origins, however, go unmentioned in the official literature. Three decades before Darrow’s patent, in 1903, a Maryland actress named Lizzie Magie created a proto-Monopoly as a tool for teaching the philosophy of Henry George, a nineteenth-century writer who had popularized the notion that no single person could claim to “own” land. In his book Progress and Poverty (1879), George called private land ownership an “erroneous and destructive principle” and argued that land should be held in common, with members of society acting collectively as “the general landlord.”
Magie called her invention The Landlord’s Game, and when it was released in 1906 it looked remarkably similar to what we know today as Monopoly. It featured a continuous track along each side of a square board; the track was divided into blocks, each marked with the name of a property, its purchase price, and its rental value. The game was played with dice and scrip cash, and players moved pawns around the track. It had railroads and public utilities — the Soakum Lighting System, the Slambang Trolley — and a “luxury tax” of $75. It also had Chance cards with quotes attributed to Thomas Jefferson (“The earth belongs in usufruct to the living”), John Ruskin (“It begins to be asked on many sides how the possessors of the land became possessed of it”), and Andrew Carnegie (“The greatest astonishment of my life was the discovery that the man who does the work is not the man who gets rich”). The game’s most expensive properties to buy, and those most remunerative to own, were New York City’s Broadway, Fifth Avenue, and Wall Street. In place of Monopoly’s “Go!” was a box marked “Labor Upon Mother Earth Produces Wages.” The Landlord Game’s chief entertainment was the same as in Monopoly: competitors were to be saddled with debt and ultimately reduced to financial ruin, and only one person, the supermonopolist, would stand tall in the end. The players could, however, vote to do something not officially allowed in Monopoly: cooperate. Under this alternative rule set, they would pay land rent not to a property’s title holder but into a common pot—the rent effectively socialized so that, as Magie later wrote, “Prosperity is achieved.”
Readers of this blog know that Lizzie Magie had created her game and started to promote it by the Fall of 1902.
“Monopoly players around the kitchen table”—which is to say, most people—“think the game is all about accumulation,” he said. “You know, making a lot of money. But the real object is to bankrupt your opponents as quickly as possible. To have just enough so that everybody else has nothing.” In this view, Monopoly is not about unleashing creativity and innovation among many competing parties, nor is it about opening markets and expanding trade or creating wealth through hard work and enlightened self-interest, the virtues Adam Smith thought of as the invisible hands that would produce a dynamic and prosperous society. It’s about shutting down the marketplace. All the players have to do is sit on their land and wait for the suckers to roll the dice.
Smith described such monopolist rent-seekers, who in his day were typified by the landed gentry of England, as the great parasites in the capitalist order. They avoided productive labor, innovated nothing, created nothing—the land was already there—and made a great deal of money while bleeding those who had to pay rent. The initial phase of competition in Monopoly, the free-trade phase that happens to be the most exciting part of the game to watch, is really about ending free trade and nixing competition in order to replace it with rent-seeking.
This is a good article, and I commend it in its entirety to your attention. It also provides links to Tom Forsythe's new site, http://landlordsgame.info/, whose graphics show many early versions of the Landlord's Game, which I look forward to exploring. I learned for the first time that the game layout that I had thought was an early one, with a lake in the center, was actually a 1939 version, based on Lizzie Magie's design but published by Parker Brothers. (I ought to have figured that out sooner, since the board includes her married name!)
It is interesting that one of the earlier versions -- 1909 -- was based on Altoona's streets. In the past year, Altoona has shifted to taxing land and not taxing buildings to fund its municipal spending. (This was a gradual shift, accomplished over a number of years; they must have liked the effect!)
Henry George is the most famous American popular economist you've never heard of, a 19th century cross between Michael Lewis, Howard Dean and Ron Paul. Progress and Poverty, George's most important book, sold three million copies and was translated into German, French, Dutch, Swedish, Danish, Spanish, Russian, Hungarian, Hebrew and Mandarin. During his lifetime, George was probably the third best-known American, eclipsed only by Thomas Edison and Mark Twain. He was admired by the foreign luminaries of the age, too -- Leo Tolstoy, Sun-Yat Sen and Albert Einstein, who wrote that "men like Henry George are unfortunately rare. One cannot image a more beautiful combination of intellectual keenness, artistic form and fervent love of justice." George Bernard Shaw described his own thinking about the political economy as a continuation of the ideas of George, whom he had once heard deliver a speech.
Later, she writes,
George found most mysterious about the economic consequences of the
industrial revolution was that its failure to deliver economic
prosperity was not uniform -- instead it had created a winner-take-all
society: "Some get an infinitely better and easier living, but others
find it hard to get a living at all. The 'tramp' comes with the
locomotives, and almshouses and prisons are as surely the marks of
'material progress' as are costly dwellings, rich warehouses and
magnificent churches. Upon streets lighted with gas and patrolled by
uniformed policeman, beggars wait for the passer-by, and in the shadow
of college, and library, and museum, are gathering the more hideous Huns
and fiercer Vandals of whom Macaulay prophesied."
diagnosis was beguilingly simple -- the fruits of innovation weren't
widely shared because they were going to the landlords. This was a very
American indictment of industrial capitalism: at a time when Marx was
responding to Europe's version of progress and poverty with a wholesale
denunciation of private property, George was an enthusiastic supporter
of industry, free trade and a limited role for government. His culprits
were the rentier rich, the landowners who profited hugely from
industrialization and urbanization, but did not contribute to it.
had such tremendous popular appeal because he addressed the obvious
inequity of 19th century American capitalism without disavowing
capitalism itself. George wasn't trying to build a communist utopia. His
campaign promise was to rescue America from the clutches of the robber
barons and to return it to "the democracy of Thomas Jefferson." That
ideal -- as much Tea Party as Occupy Wall Street -- won support not only
among working class voters and their leaders, like Samuel Gompers, but
also resonated with many small businessmen. Robert Ingersoll, a
Republican orator, attorney and intellectual, was a George supporter. He
urged his fellow Republicans to back his man and thereby "show that
their sympathies are not given to bankers, corporations and
I commend the entire post, adapted from Freeland's new book, Plutocrats. It ends with these paragraphs:
today urgently needs a 21st century Henry George -- a thinker who
embraces the wealth-creating power of capitalism, but squarely faces the
inequity of its current manifestation. That kind of thinking is missing
on the right, which is still relying on Reagan-era trickle-down
economics and hopes complaints about income inequality can be silenced
with accusations of class war. But the left isn't doing much better
either, preferring nostalgia for the high-wage, medium-skill
manufacturing jobs of the post-war era and China-bashing to a serious
and original effort to figure out how to make 21st century capitalism
work for the middle class.
and the technology revolution aren't going away -- and thank goodness
for that. Industrialization didn't go away either. But between 1886,
when George lost the mayoral race, and the presidency of FDR, American
progressives invented, fought for and implemented a broad range of new
social and political institutions to make capitalism serve the whole of
society -- ranging from trust-busting, to the income tax, to the welfare
are living in an era of comparably tumultuous economic change. The
great challenge of our time is to devise the new social and political
institutions we need to make the new economy work for everyone. So far,
that is a historic task neither party is taking on with enough energy,
honesty or originality."
Along the same lines, you might find interesting an earlier post here, an article by Thomas Shearman entitled "Henry George's Mistakes." (He was a co-founder of Shearman & Sterling, and went on to write some excellent articles on plutocracy in The Standard, October, 1887.)
"The wages problem resolves itself into a very simple question, viz.: Which is the better for a community — to have 10,000,000 men earning $2.50 a day, with hours that enable them to read and rest and pass a fair proportion of their time with their families, and at the same time have no millionaires, or to have those 10,000,000 men working fifteen hours a day at $1.50, and have a few score millionaires?"
The Standardwas devoted to issues like this, and makes excellent reading in this decade and century.
It might be worth noting that in those days when one spoke of a millionaire, the reference was to someone whose assets totalled over $1 million. Today, it is commonly used to refer to someone whose annual income is over $1 million. But you'll notice what workmen's wages were in 1887 -- $1.50 a day is $468 per year*, and likely didn't leave much, if anything, for savings. [6 days a week.]
So which IS better for the community? The families making $1.50 or $2.50 a day are spending nearly every penny of that, just in order to get by. The millionaires can only spend so much on the necessities of daily life, plus some generous amount on luxuries. The rest they will invest, one way or another, and the wise ones, in our current structure, will "invest" in land -- particularly choice urban sites -- and natural resources, since we as a society are so generous about letting the owners of these assets keep most of what those assets earn, despite them having nothing to do with having created those assets, and being in no position to create more in response to demand, which will naturally increase with population!!
THAT is the problem with our current "generosity."
The spending of the 10 million on the necessities of daily life creates jobs for a lot of other people. (The portion that goes to their landlords in payment for the right to occupy bits of urban -- or other -- land, DOESN'T create any jobs; it simply enriches the landlord. I don't begrudge the landlord the portion that relates to the building, or to services he provides, such as, say, a doorman in the city.)
On August 1, 1905, Tolstoy's letter, "The Great Iniquity" was published in the London Times. The text follows. It quotes extensively from Henry George's speech, The Crime of Poverty, which is one of the two speeches that initially "grabbed" me to look more closely at George's ideas.
I'm reading through parts of The Standard, Henry George's weekly newspaper from 125 years ago. In the issue I finished the other day, there was a reference to there being 154 contributors to that issue (and 100,000 readers, a figure one might find a bit difficult to believe -- this was in the first year of publication, though pass-along readership, particularly in the numerous local "land and labor" and "single tax" clubs, and library copies might make that credible). Though each issue at this time runs 8 printed pages, when I do "print preview" there are generally 90 to 110 pages of text per issue.
The piece below is signed by George, and while it is speaking to the anarchist trial in Chicago, it contains a lot that is extremely relevant in this election year 125 years later. It comes from page 1 of the October 8, 1887 issue.
I have seen no statement of the ground on which the authorities of Union
Hill, New Jersey, prohibited the meeting of sympathy for the Chicago
anarchists, which was to have been held there on Sunday afternoon, and
was prevented by the police with a free use of their clubs. But whatever
may have been the legal excuse, the action was wrong in principle and
mistaken in policy. We cannot too carefully guard the right of free
speech, and the surest way to prevent the spread of doctrines wrong in
themselves is to allow them to be freely ventilated, drawing the line
only when overt acts of violence are committed or incited to.
This, is illustrated by the effect which the violent language used by
the sympathizers of the Chicago anarchists has been producing, and which
is likely to be retarded by such occurrences as that at Union Hill. The
withdrawal from the Central labor union on Sunday week of the
representatives of the strongest and most influential of its component
bodies rather than permit themselves to be trapped into action which
would have been used as an expression of the sympathy of the workingmen
of New York with the methods and deeds of the Chicago anarchists is
indicative of the marked change, of opinion, which has been produced by
the ravings of the socialists of the progressive labor party.
Among the great body of workingmen there has never been any sympathy
with the bomb throwers of Chicago or any justification of anarchistic
methods, but there was a widespread impression that the men condemned at
Chicago had, in their excited state of public opinion, failed to get a
fair trial: and this feeling led some of the representative men of the
New-York trades unions, upon the first receipt of the news that the
anarchists had been refused a new trial, to consent to put their names
to a circular calling for a protest against the execution of the
sentence. But the violent utterances of the “progressive socialists,"
one of whom, at the meeting of the Central labor union last Sunday week,
called on God to bless the hand that threw the bomb at Chicago, and
their attempt to put the Chicago anarchists in the light of leaders of
the industrial movement who were being persecuted to the death for
legitimate and laudable efforts in the cause of labor, have produced a
strong reaction, well, indeed, may the personal friends of the men who
in Chicago are under sentence of death declare that their blatant
“sympathizers” are their worst enemies.
The truth is that there is no ground for asking executive clemency in
behalf of the Chicago anarchists as a matter of right. An unlawful and
murderous deed was committed in Chicago, the penalty of which by
the laws of the state of Illinois is death. Seven men were tried on the
charge of being accessory to the crime, and after a long trial were
convicted. The case was appealed to the supreme court of the state of
Illinois, and that body, composed of seven judges, removed, both in time
and place, from the excitement which may have been supposed to have
affected public opinion in Chicago during the first trial, have, after
an elaborate examination of the evidence and the law, unanimously
confirmed the sentence.
That seven judges of the highest court of Illinois, men accustomed to
weigh evidence and to pass upon judicial rulings, should, after a full
examination of the testimony and the record, and with the responsibility
of life and death resting upon them, unanimously sustain the verdict
and the sentence, is inconsistent with the idea that the Chicago
anarchists were condemned on insufficient evidence. And the elaborate
review of the testimony which is given in the decision of the supreme
court dissipates the impression that these men were only connected with
the bomb throwing by general and vague incitements to and preparations
for acts of this kind. Even discarding the testimony (contradicted by
other testimony) that Spies handed a bomb to the man who is supposed to
have thrown it, there was enough evidence left to connect the seven men
with a specific conspiracy to prepare dynamite bombs and to use them
against the police on the evening on which the bomb was thrown. It was not indeed proved that any of the
seven men threw the bomb, nor even was it proved who did throw the bomb,
but it was proved beyond any reasonable doubt that these men were
engaged in a conspiracy, as a result of which the bomb was thrown, and
were therefore under the laws of Illinois as guilty as though they
themselves had done the act. It may be said that these men had worked
themselves up to the belief that it is only by acts of violence and
bloodshed that social reform can be attained, but that does not affect
the justice of their sentence. No matter how honest or how intense may
have been their conviction on this point, organized society is none the less justified in protecting itself against such acts.
There may be countries in which the suppression by an absolute despotism
of all freedom of speech and action justifies the use of force, if the
use of force ever can be justified. But even in such countries complaint
cannot be made when the sword is unsheathed against those who draw the
sword. In this country, however, where a freedom of speech which extends
almost to license is seldom interfered with, and where all political
power rests upon the will of the people, those who counsel to force or
to the use of force in the name of political or social reform are
enemies of society, and especially are they enemies of the working
masses. What in this country holds the masses down and permits the
social injustice of which they are becoming so bitterly conscious, is
not any superimposed tyranny, but their own ignorance. The workingmen of
the United States have in their own hands the power to remedy political
abuses and to change social conditions by rewriting the laws as they
will. For the intelligent use of this power thought must be aroused and
reason invoked. But the effect of force, on the contrary, is always to
awaken prejudice and to kindle passion.
There is legitimate ground on which executive clemency may be asked for
the Chicago anarchists — that, being imbued with ideas which germinate in
countries where the legitimate freedom of speech and action is sternly
repressed, they were not fully conscious of the moral criminality of
their action, and that the main purpose of their punishment — the
prevention of such crimes in future — will be as well served, if not even
better served, by a commutation of the sentence of death into a sentence
This last is a very strong ground for the interposition of executive
clemency; and it is sincerely to be hoped that the governor of Illinois
will see its force. A tragical death always tends to condone mistakes
and crimes, and a certain amount of sympathy will undoubtedly attach to
the Chicago anarchists if they are hanged, which would not be aroused if
they were merely imprisoned.
But in whatever expression of opinion associations of workingmen who do
not themselves believe in the use of dynamite may see fit to make upon
this subject, there should be nothing which tends to put the Chicago
anarchists in the light of leaders and martyrs in the cause of American
There are certain lessons connected with this Chicago tragedy that are
well worth the consideration of every thoughtful American. The
appearance in this country of a violent phase of anarchism is not to be
imputed entirely to the ignorance or viciousness of foreigners
unacquainted with our institutions. If they did not find in this country
deep and grievous social injustice, they would not retain the idea of
violence as a remedy for social evils after coming here; and were it not
for this injustice which large bodies of our people keenly feel, the
man who should propose violence or plot violence as a means for improving the condition of the
people would be laughed into silence. The really dangerous thing in this
country is not the presence of foreign born incendiaries, but the
existence of industrial conditions, which, in the midst of plenty,
deprive the laborer of what he knows to be the fair earnings of his
toil, and condemn men able to work and willing to work to enforced idleness.
And the most dangerous men are in reality not the socialists or
anarchists, but the comfortable classes who declare that things as they
are are just what they ought to be, and who not only do not address
themselves to finding any reasonable or peaceful solution for social
difficulties, but do their utmost to prevent any such peaceful solution
from being generally accepted.
Nor is the talking about force confined to anarchists. The rich and
influential are too ready to talk about it, and to condone such
applications of it as the employment of Pinkerton's detectives and the
clubbing of peaceful assemblages by police. And the readiness with which
the idea has spread that the Chicago anarchists have been unjustly and
illegally condemned is a grave warning of the loss of faith in our
judicial system consequent upon the corruption of our politics. We are
yet far from the point at which it can be rationally assumed that seven
judges of a highest state court would condemn a number of their fellow
creatures to death against law and evidence; but when, as in this state,
$60,000 is sometimes spent to secure a judicial nomination, and great
corporations can make their influence felt in politics to secure friends
on the bench, the belief in judicial integrity is surely on the wane.
Another from the NYT, the day before Labor Day, 1887. (Don't miss the last paragraph.)
The organization of the parade is reminiscent of a parade that took place during the 1886 election, described in Chapter 10 of Post & Leubuscher's book, Henry George's 1886 Campaign: An Account of the George-Hewitt Campaign in the New York Municipal Election of 1886. (Incidentally, while the NYT earliest references to Labor Day are in 1887, after the NYS legislature had made it official there, P&L, writing in December, 1886, refer to a Labor Day parade in Newark on Labor Day, September 6, 1886).
I've not yet read The Standard's account of the day. (Text files of the months leading up to it are online; I'll have to read the PDF original for the following issue, which one can order on disk from the bookstore at schalkenbach.org.) Here's the relevant passage from the 9/3/87 issue, including the blurb immediately above it, which quotes the fellow who defeated George in the election; it neatly encapsulates the distinction between the kinds of taxation.
"The true theory of taxation," says Mayor Hewitt, as reported in the World, "is to tax value wherever you find it." There was once a certain man traveling from Jerusalem to Samaria, who fell in with a set of tax gatherers who conducted business on just that principle.
Labor day will be celebrated in New York this year as a legal holiday. It was in 1882 that the Central labor union, then recently formed, issued a call to the labor organizations of New York to parade through the heart of the city on the first Monday of September. It was only with the greatest exertion on the part of a few men that the parade was made a success; but a success it was, and immediately after it was suggested that labor organizations set aside the first Monday of September in each year as labor’s holiday.
In 1883 the celebration here was much more significant than in 1882, and in several other cities it was also observed. During the following three years the voluntary observance of the day by organized labor grew into an institution in all the leading cities of the Union, and at the late session of our legislature it was legally made a public holiday in this state.
It is evident that the day will be very extensively recognized. Parades and meetings are to be held not only in the large cities, but in towns and villages. The farming population is not yet aroused to the significance of the day to them. Such persistent efforts to narrow the labor movement to artisans have been made by the pro-poverty press, to which a few members of labor organizations have unfortunately lent their influence, that farmers are disposed to count themselves out of the labor movement. But as this narrowness is giving way to broader views of labor, labor day will become a welcome and honored anniversary with all who work, whether in factory or office, in the shop or on the farm.
Ready for Labor Day
For the Great Parade Expected to Include 60,000 Persons
The preparations for the Central Labor Union Parade tomorrow have been completed. Grand Marshal John Morrison issued a proclamation yesterday requesting all workingmen and workingwomen to assemble at their respective places of meeting, whence they will march to take their places in the parade. Thereby they will show that although they may differ from each other in other matters they are as a unit upon industrial questions. All workers, whether they be trades unionists, Knights of Labor, Socialists, or Greenbackers, are asked to unite in the parade, provided they believe in the principles of the Central Labor Union and in a united labor movement, for the emancipation of labor, against the common enemy, capital.
No national flags other than American ones are to be permitted in the procession. The Grand Marshal has appointed as his aides, Hugh Whoriskey, A. J. Johnson, T. J. Mahon, F. Opitz, B. Abrahams, Michael O'Brien, M. Sullivan, P. T. Larkin, William Drebs, and Charles Burton.
The printing trades have been given the right of line, and Marshal William H. Bailey will be in command of this section. The chapels of all the morning papers, with one exception, will be in line. The printing trades section will have 12 divisions that will form along the streets crossing the Bowery from Fourth-street to Grand-street. Mr. Morrison yesterday estimated that fully 60,000 men will take part in the parade.
The entire police force of the city has been ordered on duty Monday. Superintendent Murray, who has been, and is still, with his family at Far Rockaway, will return to duty on that day and will assume command of the force. One thousand patrolmen, with the necessary officers, have been detailed to preserve order along the line of the parade. They will be under command of Inspectors Steers and Williams and Capts. Brogan, Ryan, McDonnell, McElwain, Allaire, Clinchy, Eskins, Reilly, Gunner, and Killalea. There will also be a large reserve force on hand in case of emergency.
In Brooklyn Monday the public schools will be closed. All the municipal departments of that city will be closed, and the City Hall will be decorated with various flags and bunting. In this case the employes in the County Clerk's office will celebrate by eating their annual clambake at DeWitt's Cottage Hotel, Broadway Station, Long Island. Many of these gentlemen are said to be afflicted with a most egregious bivalvular consumption and confidently expect to excoriate all historic annals concerning the disappearance of the clam. In Westchester County the indications seem to be that Labor Day will be observed by laboring. There will be hard work in all but one or two factories. The convicts in Sing Sing Prison will also observe the day by laboring as usual.
Looking for the earliest references to "Labor Day" in the New York Times, I came across some interesting material. This comes from early September, 1887, 10 months after the 1886 NYC Mayoral election in which a coalition of labor groups asked Henry George to run as their candidate.
(An August 31, 2004 NYT article on the origins of Labor Day by Edward T. O'Donnell takes it back to September, 1882. Evidently the NYT of the day chose to take no note until after the Legislature had passed the bill establishing Labor Day. Nor does an archive search on "central labor union" provide as early a reference as the O'Donnell does; NYT's earliest is 9/15/1884.)
I'm still curious about how the first Monday in September was chosen. Was it only a coincidence that Henry George's birthday was September 2?
Labor Day and Idle Saturday
The last Legislature did two very foolish things when it established the first Monday of September as a holiday to be known as "Labor Day," and when it enacted that every Saturday afternoon should be a half holiday. Gov. Hill has more than the usual executive share of responsibility for the former of these performances. He recommended the measure beforehand because he thought that by pleasing "Labor" he would be playing a clever demagogue's trick, and the Legislature adopted the suggestion because its members were afraid of being outwitted by the Governor in their competition for the Labor vote. As a matter of fact, we have seen no evidence that the real workingmen demanded Labor Day. Most workmen can take a day off now and then at their own cost and take it when they want it, which they are not sure of doing if they take it on a fixed day. If they had any notion of getting Labor Day at the boss's expense that notion will be effectually dispelled. They will lose a day's work and forfeit a day's wages as on any other public holiday. The only people who are benefited by Labor Day are the people who are paid by the week or the month -- clerks, salesmen, bookkeepers, and so forth, and these do not count as "labor" at all in the estimation of the Knights.
It is silly to set apart a day on which no labor is to be done as Labor Day. It may also be mischievous. The use of the day which is suggested by its title is to organize demonstrations of Labor, by Labor, and for Labor. Now these demonstrations, as everybody knows, are apt to be demonstrations of the discontent which manual laborers, as well as laborers of other kinds, and idlers, and indeed all men whatsoever, feel about their lot, and attempts to hold somebody other than the discontented persons themselves to account for the unhappiness of their fates. With Labor this attempt takes the form of arraigning "Capital," or, concretely, of finding fault with the bosses. If, therefore, Labor Day is to be observed in any specific and distinguishing manner it will be used as a day on which one class of the community assembles to hear another class blackguarded, a suspension of labor being enjoined upon all classes for this purpose, and the whole performance going on under the express sanction of the State. To establish a holiday for this purpose is to give public authority to an un-American, undemocratic, and senseless procedure.
We have said that the only people really benefited from their own point of view by Labor Day are the men employed by the month as assistants in mercantile houses. They get their day off without any diminution of their pay. It is also for their express and exclusive benefit that the Saturday halfholiday has been established. This does "Labor" in the political sense no good whatever. If a laborer can afford to lose half a day's wages once a week he could in almost all callings arrange to do so without losing his place. If he cannot afford that loss it is a great piece of cruelty, in intention at least, for the law-making power to enact a statute which, if it were effectual, would compel him to do so. In cities, during the heat of Summer a kindly and sensible custom has grown up in many kinds of business of shutting up shop at noon on Saturday. It was very well to recognize and sanction this custom, and to encourage its extension, by making Saturday afternoon in July and August half holidays. There was no doubt a certain risk in doing this for men engaged in business that required constant communication with the banks. But the "heated term" coincides with the dullest season of such business, and the risk was worth taking. That is a very different thing from making fifty-two half holidays in the courts of the year during seasons when there is no pretext of necessity or use in idleness. If the law could be enforced it would cut down by one-twelfth the amount of work done in the State of New-York. That is a handicap which no industrial community in the world could successfully carry. Of course the law cannot be enforced. The laborers who are their own employers, including mechanics as well as farmers, will pay no attention to it whatever. Mechanics who work for other men will feel no more inclined to forfeit their wages on Saturday afternoons than on any other afternoons. Tradesmen cannot afford, now that the busy season is reopening, to lose their Saturday's trade, and even their clerks will not be benefited by the nominal half holiday if the disregard of the statute is so general as it now seems likely to be. The banks are bound by the law, and their clerks, with the clerks in public offices, will be able to spend Saturday afternoon in idleness. For this boon a new and perilous element is to be reckoned with in all credits and a source of disturbance to be introduced into business of all kinds.
Evidently this is not worth while. The judgment of all business men is that a weekly half holiday on which no debts are collectible, in addition to Sunday and adjoining it, is injurious and dangerous. Both the holiday laws should be repealed, the "Labor Day" law because it established a general holiday for the use of a special class, and the Saturday half holiday law because, except during the Summer months, the half holiday it establishes does more mischief than good.
Another item from the editorial page of the second issue of The Standard (see the preceding post, below this one for a link):
The president recently advised a young man whom he had pardoned to go to work and make himself a useful citizen, adding, "There is plenty of room for you in the world." Where? There is certainly no place in this country where a repentant convict can find opportunity for work, unless he has a good deal of money.
It is not proposed to confiscate any value that has been created by human industry. This would be robbery. But when the community creates wealth it is entitled to it as much as the individual is to the wealth he creates.
Posted on Sat, Jun 16, 2012, 9:31 am by Michael Kinsley
The current debate about rich and poor — the 1 percent versus the 99 percent — is a bit misleading because the evidence usually is data about income, not wealth. Looking at wealth would make the comparison even starker.
There are some nice deals to be had in the income tax code these days, but most wealth accumulates and passes from generation to generation with no tax at all. Warren Buffett (who has selflessly taken on the role of all-purpose tape measure in these matters) is worth $45 billion or so. Do you think that all of that $45 billion, or even most of it, has appeared on any Form 1040 on its way to the cookie jar? Even at the special, low 15 percent rate the U.S. insanely confers on capital gains?
Unlikely. Much of that $45 billion is unrealized capital gains — increases in the value of Buffett’s stock that have never been cashed in, and therefore have never been taxed. I’m not saying that unrealized capital gains should be taxed (although it’s a thought). I’m just noting that you only pay income tax when an investment is liquidated, and very wealthy people don’t have to liquidate until they actually need to spend the money.
For most of the very rich, this time is never. When you die, any unrealized capital gains disappear for tax purposes. Your heirs, if and when they sell, pay taxes only on any increase in value since they got the money. And there is no estate tax at the moment on estates of $5.12 million or less.
The Federal Reserve released new numbers on Monday. Unsurprisingly, wealth distribution is even more skewed than income distribution. In 2010, the median family had assets (including their house but subtracting their mortgage) of $77,300. The top 10 percent had almost $1.2 million, or more than 15 times as much.
But the headlines — and rightly so — went to the dismal fact that household wealth has been sinking for all categories of Americans. As I said, the net worth of the median family in 2010 was $77,300. In 2007, the net worth of the median family was $126,400. That’s a drop of almost 40 percent in just three years. (All these numbers are corrected for inflation.)
Characteristically taking the longer view, the New York Times led with the fact that household savings were back to where they had been in the early 1990s, “erasing almost two decades of accumulated prosperity.”
Most of the lost household net worth of recent years is due to the drop in housing prices. This is comforting, in a way, because the price of land and things built on land — and what, ultimately, is not? — are different from the price of other goods and services.
Let me tell you about my favorite economist, an indulgence I allow myself every couple of decades. (The last time was 1989, pre-hyperlink, unfortunately.) He was an American named Henry George, who died in 1897 at the age of 58. If you took economics in college, there might have been one sentence about him in your textbook. He once ran for mayor of New York. (Fancy that. He lost.)
George would look at our present situation and ask: In what sense were we richer three or four years ago, when the exact same housing stock sold for up to twice as much? In what sense are we poorer now? Land is special because, as Realtors like to remind us, they aren’t making any more of it. This means that you can get rich owning land without doing anything productive with it.
(Henry George: “You may sit down and smoke your pipe; you may lie around like the lazzaroni of Naples or the leperos of Mexico; you may go up in a balloon, or down a hole in the ground. …”) The natural increase in population will do the trick.
This is also true, to varying degrees, of other investments. It is true to some extent of any product that can’t be easily and quickly reproduced. It is somewhat true of houses, once they are built. (As Tolstoy didn’t write, “Cans of tuna fish are all alike, but every house is a house in its own way.”) But it is especially true of land.
My Bloomberg View colleague Clive Crook claimed recently to be a “supply-side liberal.” So was Henry George. He was as concerned about income equality as the most bleeding-heart liberal and as concerned about economic growth as the noisiest supply-side conservative.
George’s solution to everything was to eliminate all taxes on working, saving and investing, and to put the entire tax burden on unproductive land, which can’t escape the tax by moving. There are problems with this idea. But it’s provocative.
I don’t have room to do George justice, but take a look at his masterwork, “Progress and Poverty.” For an economics tract, it’s actually a fun read. And, yes, you’re responsible for it on the final exam.
(Michael Kinsley is a Bloomberg View columnist. The opinions expressed are his own.)
The following list comprises the most commonly asked questions about the concept of making land and resource rentals the source of revenue for government. As you continue this study, you will see the value from giving resources the respect they deserve and the benefits resulting from the freeing of labour, production and exchange from taxation. If you have any questions which are not covered here, or observations you would like to put to our panel, please feel free to do so by sending your question as an e-mail query and we will attempt to respond.
The inclusion of land and resources in the economic equation is central to any solution for revenue raising. A taxation solution which does not consider the nature of taxation itself and allows the continuing private monopolisation of community land and resources fails to recognise the essential role land plays in the economic equation and will not work. Land is the only element in the economic equation which is both fixed and finite. It can be monopolised. It is a unique class of asset which must be treated accordingly. If we were to wrest not the land itself, but its unimproved value from private monopolies and return the value to the community — whose very presence creates it — then we would have reduced many problems in one stroke with great benefit to production, to the environment and to the cause of individual freedom and justice.
On the subject of land and resource rents, Henry George said this:
The tax upon land values is the most just and equal of all taxes. It falls 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. When all rent is taken by taxation for the needs of the community, then will the equality ordained by nature be attained.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
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 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.