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 taxation of all property at a uniform rate is made necessary by the constitutions of about three-fourths of the States of the Union. The taxes on chattels, tools, implements, money, credits, etc., find their condemnation from the Single Taxer's point of view in those ethical considerations which differentiate private from public property. Where there arises a fund known as "land values," growing with the growth of the community and the need of public improvements, it is not only impolitic, it is a violation of the rights of property to tax individual earnings for public expenses.
The value of land is the day-to-day product of the presence and communal activity of the people. It is not a creation of the title-holder and should not be placed in the category of property. If population deserts a town or portions of a town, the value of land will fall; the land may become unsalable. When treated as private property the owner of land receives from day-to-day in ground rent a gift from the community; and justice requires that he should pay taxes to the community proportionate to that gift.
"Land value" or "ground rent" as the older economists termed it, is a tribute which economic law levies upon every occupant of land, however fleeting his stay, as the market price of all the advantages, natural and social, appertaining to that land, including necessarily his just share of the cost of government.
13. Electric utilities have long been regarded as "widows' and orphans'" stocks. Safe, if not high income. A few years ago, they were deregulated. A recent study has shown that retail electricity prices have increased faster in states that adopted competitive pricing than in those where rates continue to be set by government agencies. We all need reliable electricity. Should we permit the licenses to generate and distribute electricity to be an opportunity to make a windfall profit? (Or should we encourage municipal ownership of vital utilities?)
A. Sure! People and businesses are quite free to move from states without regulation to states with regulation if they choose. They may not mind paying 20% more for their electricity, if other conditions are good. And didn't the utilities earn it?
B. Sure. If local regulatory agencies decide that local best interests conflict with the interests of the corporate shareholders, they can re-regulate. After all, the corporations don't vote.
C. No. Electricity is important and we ought to do what we can to keep the price down so that poor people can afford electricity and still have funds for other costs of living.
D. No. Electricity is vital to the economy, and we ought to do what we can to keep it affordable to ordinary people, and not a source of corporate windfalls.
E. No. Natural monopolies ought to be publicly owned, the prices kept low, and any excess revenue accrue to the public treasury, not to the benefit of private investors.
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.
The last two or three years have brought forth a flood of literature on the question of immigration. Very little attempt has been made to discover fundamental principles; restrictive nostrums have been freely recommended, each writer appearing to believe that the millennium only awaited the adoption of his panacea. It has seemed to me that these discussions have overlooked or ignored the very first and most vital principle. That principle is involved in the question, "Have men a right to migrate?" Is the right to move about from place to place on the surface of the earth a natural right that belongs to all men equally, or is it a privilege with which nature has endowed a few favored ones, leaving it to them to grant or withhold?
The mere statement of this question brings out its own answer. Whatever degree of freedom may justly be claimed for one must necessarily be conceded to all. There can be no freedom greater than equal freedom. Whatever right I claim for myself, that must I concede to my brother. Have you, my reader, a right to change your habitation from St. Paul to California? Most certainly. Then that same right you must accord to every other one of your fellow-men. Have you a right to expatriate yourself and become a citizen of England, China or Afghanistan? With equal emphasis you reply, "Of course I have." Then you must accord that right to every other person on earth. All rights must be equal. In short, each person must be free to choose for himself his place of abode; and so long as he encroacheth not on the equal freedom of his fellows, no one may deny him.
The favorite reply of the restrictionist is somewhat as follows: "Of course no one man may justly deny his fellows their equal right with himself to migrate from place to place; but all the people, through the regular channel of legislation, may make regulations and restrictions." If this is true, then the principle of equal freedom is a fallacy, and that part of our Declaration of Independence which asserts that all governments derive every just power from the consent of the governed is nothing but an iridescent dream.
No, the immortal Declaration is right. Governments can have no powers except such as rest originally and equally in each individual citizen. Consider, what is a just government? Simply an agent of the people, chosen by the people, to do certain things for the people. What are these things that the people may delegate to their ag«nt, the government? Only such things as each citizen would have a right to do for himself in the absence of government; and of these only such things as the citizens choose to delegate. You can't delegate to your agent a power you don't possess. Your right to interfere with other people's migrations is just nothing. No other citizen has any more right than you. Sixty-five million times nothing equals nothing. A creature can never have rights its creator does not possess; so governments can never possess powers which do not inhere in each individual citizen before they come together to create their government.
I am aware that there are certain classes of socialists who claim that the powers of governments are limited only by the will of the majority; but such claims rest upon investigations so shallow, and are so plainly at variance with the principles of equal freedom upon which our democratic republic is founded, that they should be regarded as cuiiosities instead of being seriously considered.
It is also claimed that, because the members of a family may justly resent encroachments on the sacred precincts of the home, therefore the people of any country may with equal justice drive away peaceable immigrants. The cases are not parallel. The peaceable immigrant enters no man's home unbidden. He simply comes here to make a home of his own, in his own way, and this he has the same right to do as had the Pilgrim fathers who planted their habitations on Plymouth Rock. The only limitation that may justly be applied to the peaceable immigrant, is the same that applies to every other citizen — simply this: he must not encroach upon the equal freedom of his fellows.
True, our Congress attempts to enact laws to prevent people from coming to this country; but all such laws are simply tyrannical usurpations of power, without the slightest shadow of right behind them. Public sentiment may sustain them, just as it sustained the superstition of the divine right of kings to rule and rob the people; just as it sustained for centuries the laws for the burning of heretics; just as it sustains today all sorts of laws that interfere with the divine right of every man to free thought, free speech, free labor, free land and free trade; but in the very nature of things all such laws are void for want of authority — void because there is no power on earth that has any right, or ever can have any right, to enact them.
II. BENEFITS OF IMMIGRATION.
Having shown that no people can possibly have the right to prevent peaceable immigration, I now desire to show that the coming of others not only does no harm to those already here, but really benefits them.
Imagine yourself alone on an island; or, if you please, alone on a world. How poor, how weak, how insignificant you are! You must supply for yourself all your own wants. You must plow and sow and reap and thresh and grind and bake, before you can eat bread. Your clothing, in every part and in every detail, must be of your own make. Whatever shelter you have, you alone must construct. You have no one to aid you, no one with whom to divide the cares and the joys of life! How gladly would you welcome the distant sail; with what heart-throbs of hope would you watch its nearing; with what ecstasy of delight would you note the fact that an immigrant was coming! Even one would make you glad, but many would bring greater gladness. And how doubly joyous would you consider it, if, among the many strangers coming, you could but note the happy smile of some sweet maid of your former acquaintance!
Attempt to restrict immigration! No, 'twould be the last thought to rise within you. Think of the blessings those immigrants would bring. Now the subdivision of labor is possible. Now each can devote his energy to the production of such things as he knows most about, and then exchange with all the others. Now the joys of home and fireside cast about you their holy influences, and soon the patter of little feet reminds you that immigrants from out the great unknown are doubly blest in coming.
Stop immigration? Never! Each one of the ten or one hundred now occupying the island can enjoy many times more of the comforts and blessings of life than before they came together to cooperate among themselves. How anxious you all would be to open up communication with the outside world, that you might exchange the surplus products of your labor with men beyond the sea, and thus get such comforts and luxuries of life as on your own little island you could not produce. With what scorn and contempt would you look upon the person who should seriously suggest that you ought to build a row of custom houses around your island and fill them with politicians whose duty it should be to protect you from the evil effects of swapping goods when you wanted to!
Isn't it always true that ten men working together can produce far more than ten times as much as any one of them working alone? So, also, a thousand, under conditions of freedom, can produce far more than a thousand times as much as one. This principle is universal. The greater the number of the people, the more completely the labor is divided, each doing the work he knows best — provided only they are left free to exchange their surplus products — the greater the wealth of each and the more each can have to enjoy.
Some one may here suggest that if all were permitted to come freely, the island might get too full of people. Nonsense — before the island got too full the people would stop coming.
III. WHY RESTRICTION SEEMS NECESSARY.
Why, then, does restriction of immigration seem necessary? Why does the incoming of our cousins from over the water seem to do harm? Why does it in reality intensify the competition among the workmen, and make immigration seem a curse when in reality it ought to be a blessing?
These questions can all be answered in one word — monopoly. All the good things for which men labor and strive and think and plan, must of necessity be brought forth from the earth by the exertion of man. In the language of political economy, "Labor produces all wealth." But labor can produce not one single particle of wealth unless it can have land to work upon. The food we eat, the clothes we wear, the houses that shelter us, even our very bodies — all are derived from the earth; all are the result of labor applied to land. Without the earth to use, human life is impossible.
What sort of a welcome does the immigrant receive who comes to this boasted "land of the free," seeking a place where he can use his energy and skill for the betterment of himself and all those who were here before him? Is he permitted to use the earth to satisfy his needs? Yes, if he can pay the price monopoly has placed upon land. May he not travel from place to place in search of cheaper land, or that he may find an employer to hire him? Yes, if he can pay the price that law-favored highway monopolists charge for a ride. Can't he go afoot and thus escape excessive transportation charges? No, he will be arrested as a tramp and put in jail, his only consolation being that some of those who helped make the laws that caused him to become a tramp will have to pay taxes to support him while he is there. Suppose he can pay the price demanded for transportation and for land, is he allowed to keep and enjoy the products of his labor, that he may thus become a good and self-reliant citizen? No, the tax gatherer is bound by law to fine him for every good thing he does, in order that some land speculator may the more readily blackmail his fellow-men.
Suppose, by hard work, he overcomes all these unnatural obstacles that stupid laws have put in his way, and has a surplus of wheat or other product, is he permitted to exchange that surplus in order to get the things he needs for the maintenance and comfort of himself and family? Yes, but oh condition; if he exchange with his brothers who live outside the imaginary line that separates this "great free country" from the rest of the world, then he must give up from one fourth to three fourths of all he gets to a legalized robber called a customs collector before he may go home with the remainder. Or if he choose to exchange with some one on this side the line, he must pay the monopoly price that our tariff was designed to enable the home producer to extort. Suppose he submits to all these robberies and finally gets home with the fragment that remains, is he let alone to enjoy it in peace? Oh, no; the tax assessor comes around and fines him every year for having it.
What a "grand and glorious free country" this of ours is, to be sure! Is it any wonder that immigrants coming here compete with "our own laborers" for a chance to work? How could they do otherwise, when we shut away the earth from them and compel them to beg employment of the favored few upon whom our system confers the privilege of owning the planet on which we live!
This is just as true of those immigrants who come through the natural channel of birth, as of those who come from distant lands in ships; and to restrict or keep out one class is no more logical or just than to pass laws to prevent the coming of the other.
Why, then, do the citizens of foreign lands come here, and why do so many of them come in spite of all these evils that await them? Simply because they are compelled to suffer more evils where they are. But the tyranny of old world despotisms is no excuse for ours. Because in one country a man is robbed of 90% of all he produces is no reason why in another he should thank God for the robbers who take only 75.
Thus it appears that the problem of immigration does not stand alone. Freedom of migration is as clearly the right, of every human being as is freedom to breathe the air. Monopoly alone is the cause of the evil.
IV. THE REMEDY.
What, then, is the remedy? Again the answer comes clear and plain: Abolish monopoly and restore freedom. These evils have been brought about by laws that restrict and interfere with the rights of man. The remedy must come through the repeal of those laws and the restoration to man of his natural right to be free. Not more laws added, but many existing laws repealed, is the kind of legislation we now need. Our watchword must be "More liberty."
We must erase from our statute books all laws that tax men in proportion to their industry. No man should be taxed more because he has made a piece of land useful, than another is taxed for holding an equally valuable piece of land idle.
The great iron highways of the country must cease to be the private property of such as the Goulds and the Vanderbilts, the Hills and the Huntingtons. They must be made real free public highways, and all must have equal rights to use them, just as they now use the lakes and rivers, the bays and oceans, the country roads and the city streets.
All existing laws that tend to currency monopoly must be repealed. The money of the country must not be made to favor either state or national banks, nor to give the owners of mines a greater price for their products than they will command in the free markets of the world.
But most important of all and first of all, land monopoly must be destroyed. We must recognize again nature's only title to land — the title that rests upon possession and use; and the value of land — that value which is produced by the presence of population and the evolution of society — the value of land must be taken for public use; not allowed to swell the private fortunes of mere title holders.
Look over this fair America of ours today, and see how few and how scattering are its people. More than all the inhabitants of the United States could live in peace and comfort east of the Alleghany Mountains were it not fo: the curse of land monopoly. Less than half the land even in New York City is really occupied and used. More than half is only partially used or is held idle by speculators who expect to reap large profits from the increase of value which always comes with increase of population.
Why do men hold land idle? For no other reason than to pocket the difference between the yearly value which the public gives and the yearly taxes which the public takes.
How can land monopoly be abolished? By making the yearly taxes which the public takes equal to the yearly value which the public gives. When the public takes what it produces, it won't have to rob individuals of the product of their labor under the pretence of taxation. Adopt the single tax, and the vacant-lot industry is a thing of the past.
All laws that pretend to grant to corporations or individuals any special favors must be abolished.
All men must be restored to their rightful condition of freedom, and then let alone to work out each one his own career, unaided by government bounties or favors, unhindered by repressive or restrictive legislation.
Democratic government is possible only under conditions of equal freedom; and that equal freedom must not be the variety proposed by restrictionists and paternalists, where all are equally oppressed by a governing class, but that broad and genuine freedom, where each person has perfect liberty to do whatsoever best doth please himself, so long as he does not interfere with the equal freedom of his fellows.
All men must have equal rights to be on the earth, to move about on its surface, and to use its materials to satisfy their needs. Each one must be the owner of his own powers and capacities. All that his labor of hand or brain can produce is his own; and he must never be compelled to yield to individual or state any part of the product.
The value of land, which is not in any sense a product of individual labor, properly belongs to the community that has produced it. When this value is put into the public treasury where it may meet all public requirements, taxes on labor will be unnecessary, and can be abolished.
This simple, practical change in our system of taxation on the one hand destroys land monopoly and restores to labor its natural right freely to use the earth; while on the other hand it takes the burden from labor's back and leaves it free from the crushing weight of indirect taxation.
Thus again we reach the same conclusion — that only in freedom for the individual man we shall find the cure for all our social evils; freedom to think, freedom to speak, freedom to act; freedom to use the earth to produce the things that are necessary to life, comfort and happiness; freedom, absolute freedom, to exchange the products of his labor with his fellow-men the wide world over, with never a custom house nor a collector to interfere with his trading; freedom to cooperate with his fellows in all things, and never to know that government exists, except when he pays for the value of the land he uses, or when he attempts to encroach upon the equal freedom of his fellows.
With freedom established and monopoly, especially land monopoly, destroyed, the problem of immigration is solved; its terrors have vanished. The innocent comer from over the sea is no longer an enemy to take our work away and reduce us to a meaner standard of living; but a friend who comes to help us, while we all rise to better conditions and heights of nobler manhood.
He who has no clear, inherent right to live somewhere has no right to live at all. — Horace Greeley.
The land of every country is the common property of the people of that country. — Bishop McNulty.
The greatest discovery of my life is that the men who do the work never get rich. — Andrew Carnegie.
Let the great landlords beware; if once they believe that they have no need of the people, the people may in their turn think they have no need of them. — Sismondi.
All the sufferings, against which civilized nations have to struggle, may be referred to the exclusive right of property in the soil, as their source. — Professor Zachraie.
Bodies of men, land, water, and air, are the principle of those things which are not, and which it is criminal to consider as, personal or exchangeable property. — John Ruskin.
The foreign goods that compete with the goods of our manufacturers and trusts are heavily taxed at the Custom House, but foreign laborers are admited free of duty. — Hon. Tom L. Johnson.
The widow is gathering nettles for her children's dinner;'a perfumed Seigneur, delicately lounging in the Oeil de Boeuf hath an alchemy whereby he will extract from her every third nettle—and call it rent. — Carlyle.
The English landlord system, so far from having any moral basis, is founded upon a supercilious contempt of the only moral principal that can afford any justification for private property in land. — Professor A. W. Hunter, M. A., L. L. B.
Under the feudal system the proprietor was the Crown, as representing the nation; while the subordinate tenures were held with duties attached to them and were liable, upon nonfulfilment, to forfeiture. — J. A. Froude.
Those who make private property of the gift of God (land) pretend in vain to be innocent. For in thus retaining the substance of the poor they are the murderers of those who die every day for the want of it. — St. Gregory the Great.
I should myself deny that the mineral treasures under the soil of a country belong to a handful of surface proprietors in the sense that this gentleman appeared to think they did (i. e., to do with as he pleased). — Lord Coleridge.
While the tax on the land values promotes industry and therefore increases private wealth, taxes upon industry act like a fine or a punishment inflicted upon industry; they impede and restrain and finally strangle it. — Dr. McGlynn.
Every permanent improvement of the soil, every railway and road, every bettering of the general condition of society, every facility given for production, every stimulus applied to consumption, raises rent. The land owner sleeps, but thrives. — Thorold Rogers.
This bull, the very type of massive strength, who, because he has not wit enough to see how he might be free, suffers want in sight of plenty, and is helplessly preyed upon by weaker creatures, seems to me no fit emblem of the working classes. — Henry George.
Equity, therefore, does not permit property in land. For if one portion of the earth's surface may justly become the possession of an individual, and may be held for him for his sole use and benefit, as a thing for which he has an exclusive right, then other portions of the earth's surface may be so held; and eventually the whole of the earth's surface may be so held; and our planet may thus lapse altogether into private hands. — Herbert Spencer.
We permit absolute possession of the soil of our country with no legal rights of existence on the soil to the vast majority who do not possess it. A great landholder may legally convert his whole property into a forest or hunting ground, and expel every human being who has hitherto lived upon it. In a thickly populated country like England, where almost every acre has its owner and occupier, this is a power of legally destroying his fellow creatures; and that such a power should exist, and be exercised by individuals, in however small a degree, indicates that as regards true social science, we are still in a state of barbarism. — Alfred Russell Wallace.
This appeared in a California weekly 115 years ago. Much of it could have been written in 2011. Does this mean that these problems are eternal, necessary and simply can't be avoided?
Or does it mean that when we continue to maintain the structures that create these problems, we ought not to be surprised that the problem continues to show up?
These problems can be solved -- and prevented -- by a simple, logical, just, efficient reform of our tax structure. But almost none of our elected representatives are the least bit familiar with it. You might send yours a copy of Walt Rybeck's book, "Re-Solving the Economic Puzzle," if you think yours might have an open mind.
Young Men and Their Opportunities The San Jose Letter, February 1, 1896
But what are young men to do for a living? Did it ever occur to you that thousands of young Americans between the ages of 16 and 21 are pondering over that very question? What are they to do, indeed? Shall they study for a profession? Scores of young professional men in San Jose are not earning enough to pay their office rent, young lawyers, doctors, dentists, waiting for the practice that does not come.
The professions are overcrowded, some one says, let them learn a trade. What trade, pray? Would you have any of them learn the carpenter's trade, for instance? The valley is over-run with idle carpenters. Would you have them become house painters? Every other tramp one meets appears to be a painter. Would you have them learn the printer's trade? A dozen idle printers are clammoring for every place.
I was talking with a gentleman who is in the hardware business the other day. This question of idle young men came up. The merchant got down a list containing probably a score of names. Applicants, he told me, for a chance to learn the plumber's trade. "I have not a place," he said, "for one in twenty of them. They offer to work for nothing, if permitted to learn the trade. But idle journeymen apply for work every day."
It is so with every trade that may be named. Plenty of young men are fitting themselves for a $20 job, by spending months in learning shorthand and type writing. There was a time when a book-keeper could earn a living-assuring salary. He cannot now. Book-keepers, good enough for any average retail business, are hunting $40 jobs.
What are the young Americans of this generation to do, then? Such as have parents to furnish them with a home can work for $20 a month. Those with no home cannot compete with home-cheapened labor. The result is, San Quentin is filling up with young fellows under 25 years of age. Most of our tramps appear to be under 30.
Since the land is filled with idle doctors one can safely conclude that none want for medical assistance and advice. Since idle carpenters are begging for work, the people of America must have all the houses they want. There can be no more plumbing to do, for plumbers are idle; no houses that need painting for painters are tramping the country seeking work, no one without bread for there is no sale for breadstuffs, and bakers are without employment.
But, strange to say, hundreds of men are suffering for the services of the idle doctors. Families are shelterless, while carpenters are begging to build them houses. Men and women and children are suffering for bread while bread-stuffs rot, and bakers starve to death because they can find no one who can command their services.
Doctor A wants to build a house, and carpenter B is anxious to build it for him; but the house is not built. In the meantime Carpenter B's children die for the lack of medical assistance. Blacksmith C is unable to furnish his family with wood, for he "has no work." However, Wood-dealer D sees his horses go lame because he cannot afford to have them shod.
A very interesting state of affairs, is it not? Work that should be done, and plenty of it; while the young men of the nation are drifting to State prisons and the road because they can find no work.
This condition of affairs is new in America. Hungry men startle the well-fed, until they, too, hunger for the luxuries that once seemed necessities, then they are more than startled.
Along with this an evil is growing up in America that cannot be too earnestly condemned; it is that of the steadily growing custom of giving charity. The recipient of charity is demoralized. The American laborer wants work, not charity. When you give him charity you sink him to a condition lower than that of the negro slave. I know philantropists who employ Chinese, while white labor goes begging for a purchaser, who pompously "pay the white man's butcher bill." The white man wants to pay his own butcher bill, and demands work that will enable him to do it.
The evil results of this charity are doubled when school children are taught to "give to the poor." San Francisco has been turned into a pauper-making, pauper-sustaining educational institution. The papers reek with "charity," and the children are given lessons in pauperizing their elders. A year ago last winter the children were encouraged to feed the men employed at $1 a day in the Golden Gate Park. What did this mean? It meant that the children were made accustomed to see laboring Americans want for food, while the laborers, although working ten hours a day, were obliged to stoop to accept charity, and charity at the hands of children. It is very pathetic, this picture of Susie or Johnnie giving a ham sandwich or a piece of sponge cake to a hungry laboring American — a pretty picture, if you like; but the children are not benefited by it and the laborer can know no greater degradation. But, what are the young men who are leaving schools, colleges and universities each year to do for a living? Must the majority of them become objects of charity, to be given work, charity work, at wages which will not sustain life, only to be helped out of the difficulty by a lot of idle society women, who have nothing better to do than to take up the fad, charity; and by a parcel of school children who are encouraged in doing their little towards the ultimate pauperization of the American laborer?
This was most likely written by Franklin Hichorn, editor of The San Jose Letter.
Here's another interesting article from the January 1, 1887 edition of The Democrat. It speaks to some very 21st-century issues: wealth concentration, population growth, access and ownership of land and natural resources, and equality of opportunity -- to name a few. I've Americanized the spellings to make it an easier read for US readers. "Labor" refers to us, ordinary folks who need to work for a living -- not to organized labor specifically.
THE LABOR PROBLEM.
By An American.
The signs of dissatisfaction on the part of the
laboring classes are clearly apparent everywhere. Labor
organizations, strikes, boycotts, labor journals -- all these mean
something, and what that something is we cannot find out too soon.
Is the dissatisfaction
of labor simply the result of human perverseness, the envy and
jealousy of idleness and carelessness at the better success of industry
and thrift, or are there unjust forces operating on society producing
Has every man the same
chance? Can all men attain to the same fortune if all are equally
industrious and thrifty? Is there a fair field and no favor?
Certainly there is, cries a host of respondents.
Is not each man the architect of his own fortune? And they quote case
after case of men who began at the foot of the ladder, but who with
indomitable pluck gained step after step until they conquered fortune,
while others who began at the same point, neglected their opportunities
and are still toiling in poverty, where they are destined to stay to
the end of the chapter.
Is society so
constructed that to all there is the same chance? Can all by exercising
the same industry and thrift become equally wealthy? This question goes
directly to the core of the labor problem. If there is the same chance
to all, then what reason has the laborer to complain? A
little consideration answers this question.
In how many years
could society with its utmost exertions and greatest economy accumulate
enough so that toil would be no longer necessary, and forever after all
succeeding generations could live in idleness. No more plowing in
spring, no reaping in harvest, no toiling in the mine, no sailing on
the ocean — a huge, everlasting pic-nic!
Never! Toil, to restore the faded or to replace
the worn out, must be as lasting as the race. Toil, toil, toil, is the
"Men may come and men may go,
But toil goes on for ever."
Note that as fact number one and put fact
number two alongside it.
And fact number two is this: Certain families
now have the power of living for ever without toil. They
organize no industry, invent no machine, do nothing to furnish supplies
for themselves or their fellows — drones in the human hive, and yet their
cruse of oil never fails.
Now, put these two facts together:
1st. Toil must be lasting as the race;
2nd. Some are now eternally exempt from toil;
Therefore, as certain as any therefore can be,
some are endowed with privileges from which the
rest of the race must be by an inexorable physical law for ever excluded.
When I started reading this piece, from The Single Tax Review of 1914, I thought it was going to be a retelling of The Savannah, one of many memorable passages in Henry George's book, Progress and Poverty. But it turned out to be something a little different, and struck me as very topical nearly 100 years later, as we see joblessness and tremendous concentration of wealth in America, this "smartest" of countries, with supposedly expert economists trying to steer us back into something resembling prosperity. Wages tending to a minimum, and jobs disappearing. Individuals and large shareholders in companies who claim ownership of our best land and our natural resources growing rich, while the rest of us struggle to sip from the trickle-down we are told will be ours if we consent to this structure. Those who have read P&P know why the flow is in the other direction.
IT'S MINE—ALL MINE.
(For the Review.)
By BENJAMIN F. LINDAS.
The sun had just slipped
behind a few wisps of clouds that hung above the western horizon, as a
'prairie schooner' came to a stop in the fertile bottom lands on the
banks of a mighty river of the mid-west. A few trees growing in
scattered clusters were all that broke the monotony of the plains that
stretched in every direction as far as eye could see. The only
vegetation was a high, thick, tangled grass that grew in luxuriant
abundance from the rich black soil.
"Guess we had better stop here," said the driver, a
harsh-voiced squatty man of middle age, whose shifty gray eyes peered
out from under his heavy brows. "Soil looks good—no pestering
neighbors," and he tugged at the heavy mustache that hid his tightly
"All right," was the
tired response from his wife, who was slightly younger than her husband,
with traces of beauty still visible in the clear-cut profile and large,
dark, but now lusterless eyes. "But it's dreadfully lonesome, Jim."
The man was busy
unhitching the horses and made no response. He was a man of few words;
morose, hot-tempered and selfish. He had, by the strictest kind of
economy and frugality hoarded together a few hundred dollars, and,
ignorant though he was, he had left the little village in which he had
been reared in answer to an inner voice that kept prompting him to "Get
some land! Get some land!"
As I listen to the discussions about the health care legislation, and the effort to write abortion coverage out of the plans, I am reminded of some data I came across recently. It comes from a series of studies called "Overlooked and Undercounted" which are siblings to the Self-Sufficiency Standard studies I've posted about from time to time.
Most people acknowledge that what the Census Bureau says about the Federal Poverty Guideline is true: it is merely a statistical measure, with no particular relevance to the cost of living anywhere in America, much less in the places where most people live. Places with relatively low cost of living have higher official poverty rates, and places with relatively high cost of living often have lower, even negligible, official poverty rates.
The Self-Sufficiency Standard studies work with a highly reproducible and logical methodology to develop a bare-bones, no-frills, just-getting-by cost of living, in a lifestyle in which all of a family's most basic needs -- including the age-appropriate child-care which permits all the adults to be employed full time -- would be met, but with no room for savings, for debt repayment, for anything but a home-cooked meal, for gifts, or entertainment; with no provision for replacing the necessary clunker every few years. The SSS studies provide this analysis for individual states, by county, for various configurations of families. They are called SSS because they represent the cost of living without depending on anyone for free childcare, or meals, or other necessities. They take into account local tax structures, including tax credits, and are based on all meals prepared at home under the USDA low-cost food plan, which requires careful shopping and a fair amount of food preparation time and allows (October, 2009) about $2.06 per person per meal for a family with two school-age children.
In the least expensive counties in America, the SSS is about 170% of the Federal Poverty Guideline. Relatively few people live in those counties; they're rural, with few jobs and few of the amenities that larger communities offer.
Many more of us live in places where the SSS is 200%, or 300% or even 400% of the FPL. And in the places where the SSS is high, there is still a need in the workplace for people to perform the tasks which aren't very well paid: janitor, child-care, retail, etc.
The Overlooked and Undercounted studies quantify the number of households in a particular state whose income falls below the SSS in their particular county for their particular household configuration, and break out various demographics.
But I think the most important figure of all is one they have failed to provide: the percentage of America's children who are growing up in families with insufficient income to meet everyone's most simply defined needs.
I've calculated this figure for all the studies I could find. Doing so required making a single assumption: the average number of children in a family with 4 or more children (3 or more in Connecticut). I assumed 4.5 (3.5 in CT).
Here's what I found. The percentage of children living in families with less income than the FPL and the local SSS for their configuration of family:
as pct of
Source: Overlooked and Undercounted Studies
The next question is, what percentage of the children below the SSS are in families with more children?
Colorado: 13.4% of all children are in 4+ child families; but they represent 26.0% of children who live below the poverty line and 25.6% of children who live below the SSS. 36.9% of all children live in families with 3 or more children; they represent 54.8% of children who live below the SSS. Two thirds of Colorado children in 4+ child families live below the local SSS. Even in married couple households, over half of children in 4+ child families live below their SSS level.
Mississippi: 14.6% of all children are in 4+ child families; they represent 27.3% of those who live below poverty line and 24.1% of children who live below the SSS. 38.1% of all children are in 3+ child families; they represent 54.9% of children who live below the SSS and 52.7% of those who live below the SSS. Even in married couple households, over half of children in 4+ child families live below their SSS level.
California: 16.9% of all children are in 4+child families; they represent 33.1% of children in poverty and 26.9% of children below the SSS. Children in 3+ child families represent 42.1% of all children, but 63.3% of children below the FPG and 57.2% of children below the SSS. Even among married couple households with 4+ children, 74.6% of children live below the SSS.
Washington: 14.7% of children are in 4+ child families; they represent 30.2% of children below FPG and 27.1% of children below the SSS.
Connecticut: 37.1% of children are in 3+ child families; they represent 53.4% of children below FPG. Even in married couple households, 35% live below the SSS level.
Pennsylvania: 14.7% of children are in 4+ child families; they represent 30.4% of children below FPG, 29.1% of children between FPG and SSS, and 29.6% of children under the SSS level. 25.2% of children in married-couple families live below the FPG; in the 4+ child category, they are 33.8%.
New Jersey: only 10.9% of children are in 4+ child families; they represent 22.7% of those below FPG, 20.9% of those between FPG and SSS, and 21.9% of those below SSS.
So we are going to take away the possibility of employer-provided health insurance which provides abortion coverage to women who want it?
Do we really mean to promote policies which make it difficult for American couples to control how many children they bring into the world? Birth control isn't 100% reliable, and despite all best efforts, even married couples often can simply not afford another child.
Here are the statistics, straight from the O&O studies: The percentage of families (not of children) with incomes below their local SSS:
The Percentage of Families with Various Numbers of Children Whose Incomes
Fall Below Their Local Self-Sufficiency Standard Level
7. New Jersey
Source: Overlooked and Undercounted studies
These seven states are widely dispersed geographically, and together represent a significant share of US population. I'm guessing their data is fairly representative of the US as a whole.
Children in larger families are significantly more likely to live in situations without sufficient income to meet their most modestly defined needs. Should we promote policies which lead to more children?
Shouldn't we be looking for the underlying cause of insufficient wages? They aren't inevitable.
And those who have explored this blog will probably know that the underlying cause is a structural one, not an individual one. Or has your town figured out how to get along without school bus drivers, janitors, retail or child care workers, to name just a few categories of low-paid workers we rely on. Are they entitled to have children, to have a life, or are you willing to support policies which ensure that their children will be brought up under straightened circumstances? (I'd always thought that was spelled "straitened" -- as in "dire straits," but just discovered I was wrong.)
That was the name of a bi-monthly magazine published from 1926 to 1940, successor to The Single Tax Review. I want to share its premise with you. It turns out that it was expressed a bit differently from one issue to the next. These come from the 1940 volumes.
WHAT LAND AND FREEDOM STANDS FOR
Taking the full rent of land for public purposes insures the fullest
and best use of all land. In cities this would mean more homes and more
places to do business and therefore lower rents. In rural communities
it would mean the freedom of the farmer from land mortgages and would
guarantee him full possession of his entire product at a small land
rental to the government without the payment of any taxes. It would
prevent the holding of mines idle for the purpose of monopoly and would
immensely increase the production and therefore greatly lower the price
of mine products.
Land can be used only by the employment of labor. Putting land to its
fullest and best use would create an unlimited demand for labor. With
an unlimited demand for labor, the job would seek the man, not the man
seek the job, and labor would receive its full share of the product.
The freeing from taxation of all buildings, machinery, implements and
improvements on land, all industry, thrift and enterprise, all wages,
salaries, incomes and every product of labor and intellect, will
encourage men to build and to produce, will reward them for their
efforts to improve the land, to produce wealth and to render the
services that the people need, instead of penalizing them for these
efforts as taxation does now.
It will put an end to legalized robbery by the government which now
pries into men's private affairs and exacts fines and penalties in the
shape of tolls and taxes on every evidence of man's industry and
All labor and industry depend basically on land, and only in the
measure that land is attainable can labor and industry be prosperous.
The taking of the full Rent of Land for public purposes would put and
keep all land forever in use to the fullest extent of the people's
needs, and so would insure real and permanent prosperity for all.
Pretty short and sweet, isn't it? It might look out of date in this computer age -- though I would argue that it is not, even and especially in our most dense and developed cities -- but if you don't see its importance in the developed world, can you see that for the other 80%, including many places where American lives are at stake and our dollars being spent, it has huge relevance?
And as a means of ending poverty for the billions who do not get to reap the harvest of their own labor, it is of prime importance.
From the March/April issue:
WHAT LAND AND FREEDOM STANDS FOR
That the earth is the birthright of all Mankind and that all have an equal and unalienable right to its use.
That man's need for the land is expressed by the Rent of Land; that
this Rent results from the presence and activities of the people; that
it arises as the result of Natural Law, and that it therefore should be
taken to defray public expenses.
That as a result of permitting land owners to take for private purposes
the Rent of Land it becomes necessary to impose the burdens of taxation
on the products of labor and industry, which are the rightful property
of individuals, and to which the government has no moral right.
That the diversion of the Rent of Land into private pockets and away
from public use is a violation of Natural Law, and that the evils
arising out of our unjust economic system are the penalties that follow
such violation, as effect follows cause.
We therefore demand:
That the full Rent of Land be collected by the government in place of
all direct and indirect taxes, and that buildings, machinery,
implements and improvements on land, all industry, thrift and
enterprise, all wages, salaries and incomes, and every product of labor
and intellect be entirely exempt from taxation.
Taking the full Rent of Land for public purposes would insure the
fullest and best use of all land. Putting land to its fullest and best
use would create an unlimited demand for labor. Thus the job would seek
the man, not the man the job, and labor would receive its full share of
The freeing from taxation of every product of labor would encourage men
to build and to produce. It would put an end to legalized robbery by
The public collection of the Rent of Land, by putting and keeping all
land forever in use to the full extent of the people's needs, would
insure real and permanent prosperity for all.
The top 25 entries, whose 2009 holdings range from £10,800m down to £1,400m, include 16 which came from
The combined value of the top 25 fortunes is £73.88 billion. At 5% per year, that produces £3.7 billion in income -- quite a sizable amount to be shared among 25 families! (£1,400m is $2.1 billion US; £3,700m is $5.6 billion US.)
Notice that each of these fortunes is fundamentally from natural resources. Yes, there is capital involved, and labor. But under the laws of most countries, natural resource holdings and extractions are taxed lightly if at all, and labor is taxed heavily.
I just came across this piece, from the September 29th issue of Newsweek, and want to applaud:
How Not to Save the World
efforts are being made every day to end hunger, reduce poverty, save
lives. But if we truly want to solve the world's problems, here are
five things we need to do.
Democracy: If You Want to Free Your Country, First Liberate Its Land By Fareed Zakaria | NEWSWEEK
So you want to spread democracy. By now, it's pretty obvious that this
is easier said than done. George W. Bush's stirring rhetoric about
freedom has suggested a too-simple path: just rid the country of its
tyrant and the people will be free. Bush often asserts that people in
every country and culture yearn for democracy and are capable of it. To
argue otherwise represents cultural condescension. It's not that
President Bush is wrong at the abstract level — if Nazi Germany and
fascist Japan could become democratic, it can happen most anywhere —
but the argument holds at such an elevated plane that it becomes
meaningless when applied on the ground. ...
I suspect that many people relate these two words, without quite knowing why. A google alert on the two words brings me 4 to 6 items a day which mention the two words fairly close together. In many the context is "We're making progress against poverty." In others, the context is more like "we're making progress in many areas, but little progress against poverty."
Putting those two words into the search field at Amazon yields these books:
All of these books together can not have come close to the sales of Henry George's 1879 book, Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth; the remedy. By the turn of the century, over 6 million copies had been sold, it had been translated into 30 or so languages, serialized in newspapers in a number of countries. [6 million copies would be a large number today ... think of it in 1885!] Today, there are at least two foundations, created by industrialists of another era (using identical language), whose missions are to share Henry George's ideas, as expressed in Progress & Poverty -- the Robert Schalkenbach Foundation (based in NYC) and the Lincoln Foundation (with offices in Cambridge, MA), founded, respectively, by a printer and an electric utility magnate. Joseph Fels, of the Fels Naptha soap company (and brother of the endower of the Fels Planetarium at Philadelphia's Franklin Institute) also devoted much of his mature years to promoting these ideas.
George's Progress & Poverty was the #2 best seller of its decade, second only to the Bible, and the "progress" in its title helped inspire the Progressive movement. Anyone in English-speaking countries who read at all was likely to be familiar with its ideas, and George was an effective speaker who traveled widely. In NYC, he ran twice for mayor; the first time, he lost to Abram Hewitt (the Tammany Hall candidate) in 1886, but beat out the 29-year-old Theodore Roosevelt (whose Bull Moose Party platform about 25 years later looked remarkably Georgist; it is said TR learned his George at San Juan Hill, from a hero who died there); the second time, he died a few days before election day in 1897. His funeral was among the largest ever in NYC. (Search the NYT's free archives for articles.)
So what sets Henry George's Progress & Poverty apart from the other books which mention those two words in their titles? Why did he choose that title? What is the relationship between these two aspects of our society? Is it a necessary relationship, ordained by immutable natural forces or laws of economics, or is it something created by human structures, and therefore something we can alter?
George saw clearly something that others had seen through a glass darkly. He laid it out clearly in Progress & Poverty. Extend your education by reading this book. It will probably change your mind and your vision forever, and if enough of us understand the workings of the poverty machine, we will be able to retool it, and leave our children a better world, and a country which genuinely lives up to its ideals.
Progress and Poverty. You might also want to go read the first essay in George's second book, Social Problems. It is very timely.
I heard this phrase from a guest on Diane Rehm's NPR program today. And I think it is essentially a correct statement, and reflects our lack of understanding of the underlying dynamics.
We see that homeowners fare better than renters, and think that the answer to wealth distribution might be to make more renters into homeowners as a way to help them fare better.
But as a society, we could do a lot better if we all -- owners and tenants alike -- shared in the appreciation of land value, which currently accrues only to owners. If you've never thought about it before, this will sound very odd to you. But consider that (1) houses, like cars and machinery, do not appreciate. They depreciate. (2) land appreciates, for reasons which have nothing to do with the individual landholder. It appreciates because of public spending on infrastructure and services (schools, libraries, roads, highways, bridges, public health, emergency response at both the individual and community level, police, courts, jails, prisons, social workers, food stamps, It appreciates because of natural amenities like great views. It appreciates because of the presence of a healthy local and/or national economy. It appreciates because of increases in population, whether from increased fertility, decreased mortality because of better health care or fewer accidents or disabilities, immigration or migration. It appreciates because of advances in technology -- faster trains, air conditioning, elevators, earthmoving equipment advances, subways, bridge design.
Why on earth should landholders -- residential or, far more significantly, commercial -- be the beneficiaries of this appreciation? Why shouldn't we treat this value as our common treasure, since we're all equally responsible for it? Shouldn't we use this as our natural revenue base, to benefit all of us -- those who consider ourselves owners, those who are residential tenants, and those whose work is on land owned by others?
The way we do it now, tenants get nothing (and get to pay for some of that public spending, which raises next year's rent to their landlord), residential owners do pretty well, and commercial property owners, who own our best-served-by-valuable-infrastructure downtown sites (like that block in Manhattan) make out magnificently. That "magnificent" doesn't come out of thin air. It comes from the labor of all of us, often at wages well below what they should be.
Wow. Here it is. As good a quantification of the distribution of wealth around the world as one could hope for. The study, under the title above, is online here. The authors are James B. Davies, Susanna Sandström, Anthony Shorrocks and Edward N. Wolff.
As the authors note, the concentration of wealth is, if anything, underestimated in the data they start with. The distribution is shown in a couple of different ways.
Table 1 shows the percentages of wealth shown by various quantiles. Let's start with the percentage of wealth held by the bottom 50% of households in selected countries: Australia 9.0% Canada 6.0% China 14.4% Denmark -17.6% (a lot of debt for a lot of people!) Finland 7.4% Germany 3.9% India 8.1% Indonesia 5.1% Ireland 12.2% Japan 13.9% South Korea 12.3% Norway 10.4% Spain 13.2% Sweden -4.8% United Kingdom 5.0% USA 2.8%
Other than two Scandinavian Countries, the US has the lowest percentage of its wealth held by the bottom half of its wealth spectrum. Does this tell us anything about the success of capitalism (as we practice it, anyway) as a tool for sharing wealth justly or logically?
Here are similar figures for the bottom 90% in each country:
Here's the abstract for the study, The World Distribution of Household Wealth, found here:
There has been much recent research on the world distribution of income, but also growing recognition of the importance of other contributions to well-being, including those of household wealth. Wealth is important in providing security and opportunity, particularly in poorer countries that lack full social safety nets and adequate facilities for borrowing and lending. We find, however, that it is precisely in the latter countries where household wealth is the lowest, both in absolute and relative terms. Globally, wealth is more concentrated than income both on an individual and national basis. Roughly thirty percent of world wealth is found in each of North America, Europe, and the rich Asian-Pacific countries. These areas account for virtually all of the world’s top 1 per cent of wealth holders. On an official exchange rate basis India accounts for about a quarter of the adults in the bottom three global wealth deciles while China provides about a third of those in the fourth to eighth deciles. If current growth trends continue,India, China and the transition countries will move up in the global distribution, and the lower deciles will be increasingly dominated by countries in Africa, Latin American and poor parts of the Asian-Pacific region. Thus wealth may continue to be lowest in areas where it is needed the most.
But much of the natural resource wealth in the world is in the middle east and in Africa. The transfer of mineral wealth and oil wealth away from the people in the developing countries is stunning. The fact that the people of these countries see little of that wealth is simply wrong. They are as entitled to the earth's resources as we are, and if some countries are more advanced in using them, the people of those countries are being deprived by the structures we have set up.
Nibbling around the edges to ameliorate some of the effects of poverty is not going to reduce poverty or the misery it produces, if we don't recognize and eliminate the structures that create poverty.
The alternatives are to bemoan the situation, to accept it as simply in the nature of things, or to educate yourself -- and others -- on the cause of poverty and the remedy for it. Yes, singular. The Remedy. Without enacting this reform, none of the other things we attempt are going to succeed. With this reform, most of them will turn out to be unnecessary.
It is something like the serenity prayer ... serenity, courage, wisdom. It is all too easy to be serene about a system in which one perceives oneself to be coming out above the wedge, particularly if one is sure one can keep all one's own loved ones above it, too. But courage would be needed to move us toward knowledge of alternatives, and wisdom to withstand the barbs from those who are sure they are above the wedge -- and that that is all that matters. Or maybe I have wisdom and courage backwards.
... So the key to the Promised Land is to reduce the natural rate of unemployment without creating a new class of working losers. To see how to do that, we must revisit some basic economic principles.
For a century and a half, capitalists and socialists argued about ownership of the means of production as if the assets that make up the "means of production" were all of the same kind. But they're not; they fall into two distinct categories.
In one category are the assets can be produced by private, competitive effort. For convenience I'll call these house-like assets, although they include not only houses but also other buildings, as well as movable plant and equipment.
In the other category are those assets that cannot be produced by human effort, or at least cannot be produced by private, competitive effort. For convenience I'll call them land-like assets, although they include not only land but also other natural resources, building rights attached to land, and monopolies and privileges of all kinds.
The returns on house-like assets include
interest, which is the price of time-preference,
insurance, which is the reward for bearing (quantifiable) risk, and
economic profit, which is the reward for bearing (unquantifiable) uncertainty.
Those returns are an incentive to produce house-like assets. Any tax on those returns, or on the assets themselves, reduces the incentive. Conservatives repeat this argument ad nauseam but never acknowledge that it's valid only for house-like assets.
The net returns on land-like assets are usually called economic rent. Some people prefer to call them usury. But whatever you call them, they can't be an incentive to produce anything, because no private person or corporation can produce land-like assets, while the rental values of those assets are produced not by the owners, but by the demand from prospective users.
It follows that any fraction of the rental value of a land-like asset can be diverted into the public treasury without discouraging any productive activity, and therefore without raising prices. In other words, taxes on the values of land-like assets are not inflationary.
The title for this post was prompted by an article in the NYT about people not raised on farms deciding to become farmers, particularly in places near large cities. It seems that local food was said to be the answer to a number of questions. I'm generally in favor of it, but I'm not sure it is the answer to as many questions as its supporters claim. That doesn't make "local food" a bad thing; just not the answer to as many questions as it might seem.
But the title for this post sprang to mind. It seems to me that Land Value Taxation is the answer to a lot of very important questions.
By this, I mean fixing the problem of low wages -- wages insufficient to support an individual or a family in conditions we consider acceptable on a reasonable number of hours of labor per week. I don't mean minimum wage legislation, or living wage legislation, both of which I regard as well-intentioned but ultimately destructive for the community they intend to help. I don't mean measures like the Earned Income Tax Credit, either. It appears that people must jump through high hoops to get those dollars (which often seems to require professional advice, at a price), and then a significant portion of the money goes not to the wage earner but to his tax preparer/advisor, in the form of fees and interest.