LVTFan's Blog

Is "growing the pie" sufficient?

Or do we have a problem when a small segment of us -- the top 1% of the income spectrum -- capture 121% of the growth?

The reference is to the newest year of income concentration data provided by Piketty and Saez, table 1, column 4.

Gems from George: Progress, and Poverty

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.

— Speech: Moses 

The Earth-for-All Calendar: Undecimber 16 -- Proudhon

The monopoly of the natural resources, principal among which is land, causing rent, and the monopoly of exchange, causing interest, are at the bottom of all the misery and wretchedness of humanity.

—Proudhon.

The Earth-for-All Calendar: Undecimber 12 -- Cushman

The hospitals (of England) are full of the ancient. . . . The almshouses are filled with old laborers. Many there are who get their living with bearing burdens, but more are fain to burden the land with their whole bodies. Neither come these straits upon men always through intemperance, ill-husbandry, indiscretion, etc.; but even the most wise, sober and discreet men go often to the wall when they have done their best. . . The rent-taker lives on the sweet morsels, but the rent-payer eats a dry crust often with watery eyes.

—Robert Cushman, Plymouth, 1621, in Young's "Chronicles of the Pilgrims."

Shearman: The Distribution of Wealth, Part II (1887)

THE DISTRIBUTION OF WEALTH
BY THOMAS G. SHEARMAN.

II.

An Irish landlord, writing to the London Times, called particular attention to the fact that, in case all the landlords should be expelled, the whole of Ireland, outside of the large towns, would be left without a single person whose annual income would exceed $1,500. To the wealthy landlord who owns the Times, this appalling fact seems to afford such conclusive proof of the desolation and misery which would follow home rule that he deems it superfluous to add a word of comment. He considers it quite enough to say that no such state of things exists in any civilised country. That it should be eventually brought about in Ireland, he evidently believes, must be considered by every sane man as one of the most frightful disasters which could befall the human race.

I am writing in Germany, the country from which have proceeded the most important additions to the intellectual wealth of the world during the last fifty years. The man who knows nothing of the contributions made to history, to theology, to science, whether abstract or applied, by German students, knows practically nothing at all. What have been the income of the men who have thus enriched the world! Rarely so much as $1,500; generally not half that amount. Some of the world-famous German scholars accomplished their great achievements on an income of less than $600 a year.

New England developed a marvelous degree of intellectual activity in the colonial period of our history, though confined within a narrow circle. But that was a period of small incomes and very little accumulated wealth; nor did the few wealthy men contribute anything of importance to the intellectual or moral development of the people. What have the wealthy Irish landlords done for the development of the Irish people in religion, morality or intellect? What contribution has any wealthy Irish landlord ever made to literature, science, art or high thought of any kind? What benefit have these men of wealth conferred upon any part of the world in any direction? They have just held a solemn meeting to answer these questions, and their own testimony affords the best evidence against them. They claim to have advised their tenants to improve their stock, to introduce better methods of cultivation and to qualify themselves generally to pay higher rents, while they themselves have set excellent examples to their inferiors by taking good care of themselves.

Many years ago a practical joker inserted an advertisement in a daily paper to the following effect: "Wanted, by a young gentleman of good birth and breeding, board in a respectable family, where his Christian example would be considered sufficient compensation for his board." The Irish landlords do not advertise, but they get precisely that for which the young man advertised in vain. Their Christian example, however, has been chiefly directed toward hunting, horse racing and hard drinking. Certainly, down to a period less than fifty years ago, all accounts of Ireland agreed in this; and except that the drinking is conducted with more moderation, there seems no reason to believe that there has been any change.

Shearman: The Distribution of Wealth, Part III (1887)

This, the third and final instalment, appeared in The Standard, October 22, 1887:

THE DISTRIBUTION OF WEALTH.

BY THOMAS G. SHEARMAN.

III

 

Having reached the conclusion that indirect, or as the writer first called it five years ago, "crooked" taxation is certain to produce enormous inequality of wealth, that it is palpably and indisputably unjust, and that it inevitably leads to that worst form of inequality which involves the perpetual ownership of more than half of the wealth of a country by less than the one-hundredth part of its inhabitants, we are prepared to take up the next and final question in our series. 

What can be done to effect a more equal distribution of wealth, without diminishing its production?

Again let us waive the discussion of rent. Having purposely avoided all consideration of that tender subject, we will not take it up just now. Assuming that rent can rightfully be private property, and that the community is not to claim it, simply as rent — conceding all that the champions of private property in land claim — let us inquire what, nevertheless, remains to be done and ought to be done, in order to prevent the unjust use of government to the injury of the poor, and to check the artificial tendency toward the monopoly of wealth by a hundredth part of the population.

Hugh Pentecost, on the connection between crime and poverty

This excerpt from an 1890 article in The Arena seems relevant as we look at gun violence and other contemporary problems created by lack of employment and income -- and hope.

It would be far better for society if instead of speculating on the forms of punishment we turned our attention to the means of preventing the crimes for which we punish the offenders. It has been observed that most of the murders occur among the poor people, and upon the top floors of tenement houses; that is to say, among the poorest of the poor. The connection between poverty and the crime of murder, like the connection between poverty and all other crime, is demonstrably close. If we could cure the social disease of poverty, the seeds of crime would be destroyed. The people rarely think of this. They think it is our business to punish crime; but it is our best business to prevent it. Our present organization of society manufactures criminals faster than we can possibly take care of them. Poverty degrades men; it robs them of leisure, which is absolutely necessary for the development of mind, and the proper control of the passions; it keeps the people hungry and fierce; it imbrutes them; it makes Ishmaels of them — their hand is against society as the hand of society is against them. Plant a generation of paupers, and you will reap a crop of criminals.

If we are wise we will turn our attention to the most important problem of this or any age: how to so enrich the people that the temptations to crime will be minified to the last possible degree. The solution of the problem is as simple as it is important. For every millionaire we shall have a thousand tramps; for every monopolist we shall have a hundred burglars; for every woman who lives in idleness upon the fruit of others’ toil, filched from them under the name of interest or rent, we shall have a score of prostitutes; for every vacant land owner and money limiter — the twin man-starvers — we shall have a murderer. One is the seed from which the other grows. Eliminate your monopolists, the king of whom is the owner of vacant land, and your problem of crime is settled. With open opportunities for men to apply their labor to natural wealth productions, tenfold more wealth would be produced and equitably distributed; and with wealth many times multiplied and equitably distributed, a criminal would be more of a curiosity than the original three-toed horse.

If memory serves, Hugh Pentecost was an Episcopal priest, perhaps in Newark.  The title of the article from which these paragraphs come is "The Crime of Capital Punishment."

I like the word "minified."  Maybe there is a useful slogan there: Minify Taxation!  ("To make smaller or less significant; reduce.") We could collect the revenue we need with lower taxes were we to concentrate our taxes on land value, in all its manifestations.  And in the process, we would reduce poverty, reduce the cost of living, reduce wealth concentration, reverse sprawl, naturally create employment and self-employment opportunities, and stabilize our economy.  It seems to me that any one of these goals is worthy, and if this reform would move us closer to any of these goals, it is worth pursuing.  

And, importantly, with less need to rely on a social safety net, spending could be signficantly reduced.

The Earth-for-All Calendar: December 26 -- Cardinal Vaughan

Millions of human creatures are housed worse than the cattle and horses of many a lord or squire. Nearly, a million of the London poor need re-housing; the medical authority has reported against 141,000 houses as insanitary, in which the poor are huddled together, in numbers varying from four to twelve and more in a single room. What delicacy, modesty or self-respect can be expected in men and women whose bodies are so shamefully packed together?

— CARDINAL VAUGHAN, Inaugural Address to the Annual Conference of the Catholic Truth Society at Stockport, published in the St. Vincent de Paul Quarterly, New York, November, 1892, p 286.

Individual Account Retirement Plans: An Analysis of the 2010 Survey of Consumer Finances | EBRI

Note: this has some statistics you might want to know, but it is primarily a post on public policy.

Individual Account Retirement Plans: An Analysis of the 2010 Survey of Consumer Finances | EBRI.

... 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.

Harpers: Monopoly is Theft

Monopoly Is Theft | Harper's Magazine.

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!)

The Earth-for-All Calendar: October 16 -- Plutarch

His next task, and indeed the most hazardous he ever undertook, was the making a new division of their lands.  For there was an extreme inequality among them, and their State was overloaded with a multitude of indigent and necessitous persons, while its whole wealth had centered upon a very few.

— PLUTARCH, Life of Lycurgus.

The Earth-for-All Calendar: October 5 -- Spencer

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 by him for his sole use and benefit as a thing to 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 into private hands.

— HERBERT SPENCER, in 1850, Social Statics, Chap. IX.

The Earth-for-All Calendar: October 3 -- Marmontel

Let us suppose that a people is excluded from the ownership of the land.  I say that this exclusion, even if followed by no other injustice (which I think impossible), by making a man a stranger to the commonwealth, makes him indifferent to the existence of the State.

— MARMONTEL, Address in Favor of the Peasants of the North (1757), Oeuvres, Vol X., p. 72.

The Earth-for-All Calendar: October 2 -- Jefferies

That any human being should dare to apply to another the epithet "pauper" is, to me, the greatest, the vilest, the most unpardonable crime that could be committed.  Each human being by mere birth has a birthright in this earth and all its productions; and if they do not receive it, then it is they who are injured, and it is not the "pauper," oh, inexpressibly wicked word! — it is the well-to-do who are the criminal classes.

— RICHARD JEFFERIES, The Story of My Heart, Chap. X., p. 122.

The Church(es) in Politics

I'm reading through the first issues of Henry George's newspaper, "The Standard," a weekly which was published in NYC beginning in January, 1887.  It was started shortly after the mayoral race of 1886 (chronicled in Post & Leubuscher's December, 1886 book), and in the 4th issue there is a very explicit article about the role that Rome was attempting to play in NYC politics by removing from the priesthood an activist priest, the much-loved Dr. Edward McGlynn, of St. Stephen's Church, on 28th Street in Manhattan, the largest parish in the city.  (This was before the creation of New York City by combining the five boroughs.)

For over 20 years, McGlynn had been living among New York's poor, hearing the confessions of the poor, and knew how hard their lives were.  He knew the situation in Ireland which had brought many of them to the U. S., and when he read Henry George's 1879 book, "Progress and Poverty," he found the cause of their suffering, and saw how to correct the underlying cause of poverty.

The article to which I refer is entitled, "From a Brooklyn Priest"

The Body of the Catholic Clergy Sympathize With Dr. McGlynn

The Brooklyn Times prints an interesting interview with “a well known parish priest” of that city. His name is not given "for obvious reasons,” but those acquainted with the Catholic clerics of Brooklyn have little difficulty in attributing it to the most popular and influential of the Catholic clergy of that city. We make the following extracts:

“The sympathy of the body of the Catholic clergy in New York and Brooklyn is undoubtedly with Dr. McGlynn. I have talked with a great many of my brother priests of both cities on the matter, and almost without exception, they have taken Dr. McGlynn's side in the controversy, though they would be loth to do so publicly for manifest reasons. The sentiment of the body of the Catholic clergy of the two cities is that whatever has been done in Dr. McGlynn's case has been done by inspiration from this side. Of course the question at issue does not at all touch matters of faith. It is purely a question of discipline. The authorities at Rome know little or nothing of the real state of affairs at this side of the Atlantic except as they are inspired by the archbishop of the different provinces. Archbishop Corrigan is in daily communication with Rome by cable, and the views of the controversy between Dr. McGlynn and his superior that are entertained at Rome pending the personal appearance of Dr. McGlynn in the Eternal City, are the views of the archbishop of New York that are telegraphed and written there.

“I do not mean to imply that Archbishop Corrigan would willfully misrepresent the situation here, but I do say that Dr. McGlynn, with all his experience as a priest in the American metropolis, with all his practical knowledge of the condition of the poor and of the working classes in that city, is a better judge of the political needs of the masses in New York than Archbishop Corrigan is, who has spent the greater part of his career as an ecclesiastic in the state of New Jersey; and I hold that Dr. McGlynn and every other Catholic priest has the right to take an active part in the politics of the country. To say that a man of the acknowledged piety and the blameless life of Dr. McGlynn sympathizes with anything that smacks of communism or anarchy is the veriest nonsense to anyone who knows him — and who does not know everything about him today? Dr. McGlynn, as a priest, knows the awful burdens which the laboring classes of New York city have to bear through political misrule and the corrupt combination of capital to oppress them. He knows how anomalous that condition of things is which allows one man to accumulate a hundred millions of dollars within 25 years and compels another to work for a dollar a day, nay, while thousands, anxious for work, are starving for the lack of it. Hence his support of the candidate of the labor party for mayor. Dr. McGlynn did not believe that anarchy or communism would follow in the wake of the election of Henry George to the mayoralty of New York any more than he believed that Mr. George, as the chief executive of the municipal government across the East river could put his land theories into practical operation in the metropolis. Any possible change in the government of New York city must be a change for the better, so far as the poor are concerned.

“If the bishops of the dioceses in the United States were taken by Rome from among the clergy of these dioceses who thoroughly understand the social and political conditions of their people, there would be none of these disciplinary troubles. What sense is there in sending an Italian priest to Canada or an Irish priest to Guatemala as bishop? Or why should a bishop be transferred from a city in the state of New Jersey to preside over the archdiocese of New York when there are many able and holy priests in the metropolis worthy of election to the prelacy who have spent their lives among the masses of the people? In countries where the canonical law of the church is in practical application the parish priests of a diocese in which the bishopric becomes vacant send three names to Rome by majority vote. One is set down as dignus, or worthy, another as dignior, or more worthy, and a third as dignissimus, or most worthy. Any one of the three may be selected, and it sometimes happens that it is the lowest on the list who is chosen. The pope has the absolute power to go outside the list sent to him from the diocese in which a vacancy occurs, but it is a power rarely exercised and only for the most exigent reasons. If the canon law applied in America, which is only yet a missionary country and subject to the propaganda at Rome, Dr. McGlynn could not have been turned out of St. Stephen's church as he has been and his salary would have run on despite his suspension until his case was finally decided at Rome.

“It is most unfortunate that the canon law does not apply in the United States, and that the political, social and educational situation in this country is not better understood at Rome. Wealthy Catholic politicians have too much to say on church policy in this country; and unfortunately that is today the trouble in New York city. The masses of the Catholic clergy say, 'Hands off.' As long as bishops, with whom wealthy politicians are most powerful, practically say who shall be elected to the prelacy in the United States there will be a chance for trouble among the laity.

“I am satisfied that if a majority of the Catholic clergy of the dioceses of New York and Long Island could do it Dr. McGlynn would have been elected archbishop and Archbishop Corrigan would have been allowed to remain in New Jersey. I unhesitatingly say that if the votes of the Catholic clergy in these two dioceses could do it Dr. McGlynn would be restored to St. Stephen's parish tomorrow. No old priest of New York city wanted to succeed Dr. McGlynn in that parish, for they all knew how his congregation idolized him. I am also free to say that if Archbishop Corrigan had not been brought from the state of New Jersey to New York city this trouble would never have occurred.

“Mgr. Preston is the bitterest foe that Dr. McGlynn has in the diocese of New York. I do not mean to imply that the monsignor entertains personal animosity toward the ex-rector of St. Stephen's church, but he is utterly opposed to what Dr. McGlynn stands for as an American citizen. Mgr. Preston is an aristocrat and the associate of aristocrats. Even converts to the Catholic church who know Father Preston well have admitted that the monsignor dearly loves the privileges which attach to church dignitaries in Catholic countries, and is inclined to ape the civil ceremonial of such communities in his intercourse with his flock. Dr. McGlynn is poor, is of the poor and loves to associate with the poor. He is in this respect the antithesis of Mgr. Preston, and the latter is a confidential adviser of Archbishop Corrigan.”

This article, more than anything else I've read, brings home to me the extent to which the rich manage even the Church for the benefit of the rich, to the detriment of the poor.   When a priest who seeks to correct the unjust structures is deprived of his priesthood because he might upset the privileges of the rich, the country and the church are both in trouble.

When churches benefit from contributions from wealthy contributors, they will tend to act to enforce the structures which enrich those wealthy contributors, rather than rocking the boat in any way.  When economic structures funnel the community's wealth into a relative few pockets, the Church will tend to embrace those pockets, not challenge the structures.  Money in elections is not the only corrupting force.

 

The Earth-for-All Calendar: September 8 -- Sir Thomas More

The nobility and gentry and even those holy men, the abbots, not content with the old rents that their farms yielded, nor thinking it enough that they, living at their ease, do no good to the public, resolve to do it hurt instead of good.  . . .  As if forest and parks had swallowed up too little of the land, those worthy countrymen turn the best inhabited places into solitude.

 — SIR THOMAS MORE, Utopia (1516), Book I.

The Earth-for-All Calendar: July 31 - John Stuart Mill

The ordinary progress of a society which increases in wealth is at all times to augment the incomes of landlords — to give them both a greater amount and a greater proportion of the wealth of the community, independently of any trouble or outlay incurred by themselves. They grow richer as it were in their sleep, without working, risking or economizing. What claims have they, on the general principles of social justice, to this accession of riches?

— JOHN STUART MILL, Principles of Political Economy, Book V., Chap. 2, Sec. 5

 

The Earth-for-All Calendar: April 13 -- Jefferson

Wherever there is in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right. The earth is given as a common stock for man to labour and live on.

— THOMAS JEFFERSON (1785), Ford's Writings of Jefferson, Vol. VII., 36.

The Earth-for-All Calendar: April 1: Queen Elizabeth's Prayerbook

Thou, O Lord, providest enough for all men with Thy most liberal and bountiful hand, but whereas Thy gifts are, in respect of Thy goodness and free favour, made common to all men, we (through our naughtiness, niggardship and distrust), do make them private and peculiar. Correct Thou the thing which our inequity hath put out of order, and let Thy goodness supply that which our niggardliness hath plucked away.

— A Prayer for Them That Be in Poverty, from Queen Elizabeth's Private Prayer Book (1578).

Bob Andelson: An Open Letter to Pope John Paul II

Open Letter to Pope John Paul II

by the late Robert Andelson

Your Holiness,

THE QUESTION OF MISERY

At the outdoor mass you held in Wroclaw in Poland during your recent visit to that country, you said the following very true and sincere words:

"The Earth is capable of feeding everyone. Why therefore -- here at the end of the 20th century -- should thousands of people die from starvation" -- "Pray solidarity will prevail over the unrestrained thirst for profit and ways to handle laws of trade, which do not take into consideration inalienable human rights".

It was the same concern about the greed of the wealthy and the plight of the poor, that your predecessor, Pope Leo XIII, expressed in his Encyclical Letter of 1891, 'Rerum Novarum'. Yet, in the more than hundred years that have past, if there has been a change, it has been for the worse!

The wealth is there. The growth of industry and the discoveries of science about which Pope Leo spoke, are even more fantastic and surprising than he would have imagined in his most inspired dreams. The enormous fortunes of individuals, of which he also spoke, have become more enormous. Yet the poverty is still there.  Even in countries that are considered wealthy, people are homeless and live in cardboard boxes; people die, not just by the thousands as your Holiness said in Wroclaw, but by the millions, from poverty related diseases, malnutrition and starvation. You are indeed right to ask the question:

WHY?

THE EXCLUSION FROM THE GIFTS OF GOD

As your Holiness will know, the Encyclical Letter of 1891 was not only an attack on socialism, but also a strong defence of the right to hold land as private property, a right that Pope Leo XIII claimed to be natural.

But the right to hold land includes the right for the owner to exclude other people from it, and, as all usable land in industrially developed countries is owned in that way, people without such a right will be unable to enjoy the gifts of God unless they accept the conditions exacted of them by a landowner. Neither can they work, reside nor relax without land, and again they have to accept conditions exacted by a landowner.

Normally the landowner will ask people to pay the market-determined site rental, which is high because of the many excluded people who want land, or he will offer to let them work at a market-determined wage, which is low because of many excluded people wanting a working place.

Some people, in fact -- as a consequence of the many excluded -- a growing number of people, can neither qualify for a job nor afford to pay the site rental, and they have to live on the streets, on the roads, at the dumping grounds or wherever they can find a poor shelter, some clothes and a little to eat. Some of them find that crime and prison give them a better life than there is available through the legal opportunities open to them.

In some countries Social Security is implemented to mitigate the cruel consequences of the exclusion of people from the gifts of God. The Social Security bill is not paid by landowners, but by entrepreneurs, wage earners, pensioners, savers and consumers.

In other countries only private charity is available to relieve the hardships.

But neither Social Security nor charity will change the basic injustice that causes the horrible conditions of the people excluded, that increases the site rentals to be paid for the use of land, and reduces net-wages, widening the gap between poor and rich. The basic cause of these evils has to be destroyed.

Political leaders from all over the world, including representatives of the Holy See, agreed at the United Nations conference on Human Settlements (Habitat II) at Istanbul last year, that:

"The failure to adapt, at all levels, appropriate rural and urban land policies and land management practices remains a primary cause of inequity and poverty".

LETTER TO POPE LEO XIII

Allow us, your Holiness, to point to the Open Letter of September 11th, 1891, written in New York by Henry George and sent to your predecessor his Holiness Pope Leo XIII, as a response to 'Rerum Novarum'.
 
Published as a book this Open Letter has been read by many thousands, and still today the book is sold and read.

Henry George did consider 'inalienable human rights' and 'unrestrained thirst for profit and ways to handle laws of trade'. On exactly this background he spoke for all people's equal rights to the gifts of God.

To maintain this right for everybody and at the same time to allow exclusive right for some to own land as private property, he advocated that people who are given the exclusive right to own land -- and thereby the right to exclude other people from the gifts of Nature -- should pay a compensation to the people they exclude (in fact to all citizens).

The compensation, as a duty to be paid by the landowners, should be the market-determined rentals of the sites from which they can exclude others. This being a fair charge of justice as the rentals are not due to efforts or investments made by the landowners, but due to the development of society and to the growth of the population of human beings, all wanting a place to work, and a place to reside.

The rentals should be collected from all landowners by society, and the revenue should be used to the benefit of all citizens. In that way, Henry George emphasized, all citizens would be able to get their equal share of the gifts of God.

HOLY INCENTIVES OR HOLLOW FALSEHOOD

We do agree with your Holiness and with Henry George that people have private right to property created by man, the right to the fruits of their labour; and also that people can achieve private right to exclusive possession of land, from which they can exclude other people.

But we find it logically inconsistent to believe that people have equal right to life and to be on the Earth, when at the same time some of them have exclusive right to own land as private property without paying compensation to those people whom they exclude from their land.

Your Holiness' sincere words, as quoted initially in this letter, accord with Rerum Novarum of 1891 and with the Habitat II statement quoted above, but they will only become true if your Holiness will succeed in urging on the rulers/governments of this world to collect the annual market-determined Site Rentals of all land in their countries, and distribute the revenue thus acquired to the benefit of all their citizens.

If your Holiness could succeed in persuading the governments to do so, all people on Earth would gain equal access to the gifts of Nature, and true solidarity would become a reality. If not, all statements about equal right to life, to work, to education and to residence, will continue being hollow and false; and our successors will not see a change for the better; on the contrary, they will see the gap between very rich people and alienated poor people grow bigger, and the problems of poverty grow more serious than they are today.

OUR PRAYER

We pray your Holiness may succeed in convincing the governments of this world of the importance of public collection of the annual market rental of all land, and the revenue to be used for equal benefit of all the citizens, thus to provide far all human beings, equal rights to the gifts of Nature.

Let this become the manifestation of the new Millennium, the 2000 year anniversary of the birth of Jesus Christ. Let it become a Jubilee in the original meaning of the word, striking unjust shackles from society; thereby preparing a new age of humanity, a social life in friendship and peace.

 

The Earth-for-All Calendar: March 11 - Pope Gregory the Great

Those who make private property of the gift of God pretend in vain to be innocent. For in thus retaining the subsistence of the poor they are the murderers of those who die every day for want of it.

— POPE GREGORY THE GREAT, Cura Pastoralis,

Sweet's Early English text Society, Vol. II., p. 334.

To fight the effect, while feeding the cause ... and our laws

Pray folks out of temptation, while driving them in,
Is the usual way to atone for the sin;
To fight the effect, while feeding the cause,
You will find the foundation of most of our laws.

from the letters of Edwin Burgess, mid-1850s

(Letter #2)

The Land Questions #18 -- Gambling

18.  Why do we give special privileges to certified Native American tribes: e.g., the right to run casinos, sell cigarettes without collecting taxes, etc.

A. Because some Native American communities are poor, or have good lobbyists.  Gambling creates jobs for some and great riches for some, while preying on others.

B. Because "our" ancestors took away something absolutely vital from their ancestors (even if many of our ancestors arrived well after the event): land.

C. Because a significant minority of Americans realize they can't get rich through honest labor and think they have better chances at the gambling table.

D. Because states collect some portion of the casino revenue (in Connecticut, 25%).

D. Your suggestions

The Earth-for-All Calendar: February 13 -- Edward Carpenter

As far as the palaces of the rich stretch through Mayfair and Belgravia and South Kensington, so far (and farther) must the hovels of the poor inevitably stretch in the opposite direction. There is no escape. It is useless to talk about better housing of these unfortunates unless you strike at the root of their poverty, and if you want to see the origin and explanation of an East London rookery, you must open the door and walk in upon some fashionable dinner-party at the West End, where elegance, wealth, ease, good grammar, politeness and literary and sentimental conversation only serve to cover up and conceal a heartless mockery — the lie that it is a fine thing to live upon the labor of others.

— EDWARD CARPENTER, England's Ideal, pp. 7-8.

Shalom and Taxation

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

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

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

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

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

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

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

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

Today's economic problems aren't new

Today's Economic Problems Aren't New.

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

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

The page continues,

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

What you will learn

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

What you won't learn

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

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

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

Social Problems

Social Problems.

A civilization which tends to concentrate wealth and power in the hands of a fortunate few, and to make of others mere human machines, must inevitably evolve anarchy and bring destruction. But a civilization is possible in which the poorest could have all the comforts and conveniences now enjoyed by the rich; in which prisons and almshouses would be needless, and charitable societies unthought of. Such a civilization waits only for the social intelligence that will adapt means to ends. Powers that might give plenty to all are already in our hands. Though there is poverty and want, there is, yet, seeming embarrassment from the very excess of wealth-producing forces. "Give us but a market," say manufacturers, "and we will supply goods without end!" "Give us but work!" cry idle men.

The evils that begin to appear spring from the fact that the application of intelligence to social affairs has not kept pace with the application of intelligence to individual needs and material ends. Natural science strides forward, but political science lags. With all our progress in the arts which produce wealth, we have made no progress in securing its equitable distribution. Knowledge has vastly increased; industry and commerce have been revolutionized; but whether free trade or protection is best for a nation we are not yet agreed. We have brought machinery to a pitch of perfection that, 50 years ago, could not have been imagined; but, in the presence of political corruption, we seem as helpless as idiots. The East River bridge is a crowning triumph of mechanical skill; but to get it built a leading citizen of Brooklyn had to carry to New York $60,000 in a carpet bag to bribe New York aldermen. The human soul that thought out the great bridge is prisoned in a crazed and broken body that lies bedfast, and could watch it grow only by peering through a telescope. Nevertheless, the weight of the immense mass is estimated and adjusted for every inch. But the skill of the engineer could not prevent condemned wire being smuggled into the cable.

The progress of civilization requires that more and more intelligence be devoted to social affairs, and this not the intelligence of the few, but that of the many. We cannot safely leave politics to politicians, or political economy to college professors. The people themselves must think, because the people alone can act.

Wow!  How many quotes can you take from those 3 paragraphs?  The source is the first essay in Henry George's book, "Social Problems," published in 1883, entitled "The Increasing Importance of Social Questions."

• "A civilization which tends to concentrate wealth and power in the hands of a fortunate few, and to make of others mere human machines, must inevitably evolve anarchy and bring destruction."

• "a civilization is possible in which the poorest could have all the comforts and conveniences now enjoyed by the rich; in which prisons and almshouses would be needless, and charitable societies unthought of. Such a civilization waits only for the social intelligence that will adapt means to ends. Powers that might give plenty to all are already in our hands."

Think about that one not just with regard to America, but with regard to the entire world.

• "Though there is poverty and want, there is, yet, seeming embarrassment from the very excess of wealth-producing forces. 'Give us but a market,' say manufacturers, 'and we will supply goods without end!' 'Give us but work!' cry idle men."

• "The evils that begin to appear spring from the fact that the application of intelligence to social affairs has not kept pace with the application of intelligence to individual needs and material ends. Natural science strides forward, but political science lags."

• "With all our progress in the arts which produce wealth, we have made no progress in securing its equitable distribution."

• "The progress of civilization requires that more and more intelligence be devoted to social affairs, and this not the intelligence of the few, but that of the many."

• "We cannot safely leave politics to politicians, or political economy to college professors. The people themselves must think, because the people alone can act."

"Social intelligence."  Nearly 130 years have passed since Henry George wrote these words.  Nearly every college has a Social Sciences division.  Most have a political science department and an economics department.  Almost all have history departments.  Many have American Studies programs.  I'd venture to say that not one in 1000 has a professor who knows these ideas well.  Many know the name of Henry George, as they know some other names from his era, but few have had the quality of education that would include exposure in depth to George's ideas.

Some would say that these social questions have no solutions, and move on to discuss some other topic they think more important, or solvable.  Some might murmur that any attempt to solve these questions would by definition be somehow socialistic, and therefore is not worth a further thought. (Much depends on what you mean by "socialistic;"  the word seems to be a conversation closer in many circles, which is a shame -- though I do not regard George's ideas as remotely socialistic as the term is commonly used.) 

Those who have sat with Henry George's ideas know differently. These problems can be solved.  Might you join that group?  What would it feel like to know these problems do have solutions?

And as we enter a presidential election season, this one bears repeating:

"We cannot safely leave politics to politicians, or political economy to college professors. The people themselves must think, because the people alone can act."

The Superficial Reformer

If you've just arrived at this page, this is the first (last) of perhaps 10 items I've picked up from reading a year's worth of an 1895-6 weekly called The San Jose Letter. I'm amazed how topical they are 115 years later!

From The San Jose Letter, of November 28, 1896:

THE SUPERFICIAL REFORMER.

A great fault of the human family today, when starting out on reform measures, is to battle with effects and neglect the primary causes of the evil. What man, be he the most uneducated tiller of the soil, would start out to eradicate weeds by cutting them off at the surface of the ground? Would he not dig down and remove the roots? And yet all the great reform parties, temperance people and labor organizations, are fighting effects, all claiming to be right, while the "ignis fatuus" is luring them on to their own destruction.

What, then, is the primary cause of the evil that is today filling our jails and insane asylums, making prostitutes of women and placing a premium upon drunkenness and suicide, while the products of industry are taxed to their utmost to keep up this damnable retrograde movement of our civilization? Are these the results of man's development in freedom, or are they the results of present conditions over which he has, or thinks he has, no control? Cannot this entire brood of evils be laid at the door of poverty and want, the result of bad laws? Anything, therefore, that will better man's condition will certainly lesson crime. Such a state of affairs is what the single tax will bring about. It has already been shown that taxing a thing has a tendency to discourage it, hence we are going to stop taxing industry and production, because these are the mainstays of existence, and to discourage them is to say that we have no right to that which nature decreed should be ours, but our entire revenue for community purposes, we propose to take from land values created by reason of the presence of the community.

—George W. Loehr in National Single Taxer.

If we don't go to the root of the problem, we and our descendants are going to be spending centuries trimming the weeds.

"Radical" has an honorable root: Radix, radicis --the root!  Radish, radius, eradicate, radical ...

The current conversation about "tax reform" seems to mostly consist of arguing about federal income tax brackets.  It doesn't go to the root of the problem.  Most of those carrying on the conversation wouldn't know the root if they stumbled across it.

Charity or Justice: How We Treat the Poor

THE SOLID TRUTH OF IT.

And what is this lowest man who holds the fate of the world in his hands; whom we must lift or perish? He is landless, workless, poverty stricken, degraded, drunken, dishonest. In a word overflowing with plenty, he lacks everything. In a world of brightness, he and his cower in a cellar, or burrow in a sun-abandoned court. With abundance of pure air, they breathe only the foul.

Let us go to this man, whom we have thus painted in somberest hues; loveless, imbruted, dirty, lazy. What shall we do with him?

Let me rehearse some of the favorite processes of the philanthropic tread-mill so amiably worked by the well-meaning, though willfully blind, in their efforts to "raise the fallen":

• Preaching Jesus to his soul.
• Giving soap and water to his filth.
• Compelling him, willy-nilly, to work.
• Exhorting him to abstinence.
• Giving his children a taste of heaven on earth, with a treat of fresh air (sending them back again to hell of foul air).
• Building airy tenements for his occupation.
• Providing for his immediate wants in food, fuel, clothing and physic.

Although these do not exhaust the enumeration, they are typical and must suffice. But they are all wrong wrong, wrong.

What! Wrong to preach Jesus to the fallen? Yes, wrong to preach Jesus to them, until we practice Jesus ourselves.

What a mockery to preach Jesus to the fallen man, with the proceeds of his stolen rights in our pockets, in the suit of clothes we wear, and in the meal we enjoyed before we went forth to meet him. The first lesson in religion we can give him is an object lesson in the restoration of his lost inheritance in the earth. The first sermon he hears us preach should be one exhorting ourselves to repentance, confession, and restitution. Having obeyed and thus done the first duty in the premises, it remains for us to aid our fallen and defrauded brother in recovering the ground from which we have thrust him.

And this fallen man is not hurt harmlessly. He is the fly in the ointment of our wealth. He is the barrier to the realization of our social dreams. To secure ourselves we must secure him. The oneness of industry in its best conception is impossible until we have made this our brother one with ourselves. In some sad respects we trace evidences of our relationship. Is he sinful? So are we. Has he fallen? So have we. He was robbed and fell. We robbed and fell. Clearly our first duty is to "restore the pledge, given again that we have robbed." We can restore; he cannot recover; he is helpless; only we can help.

Until the lowest man and his rights are practically dealt with, and his opportunities to rise assured, we shall suffer; depressions, crashes, anxiety, overcompetition, aggravated covetousness, will mar all our industry.

We produce as individuals; we suffer as an organism. No man liveth to himself. The need of one is the calamity of all.

We have taken our brother's inheritance — the right to the use of the earth — and we make merchandise out of it. Let us agree to pay into the public treasury the whole annual value of the land we use in city or county, only retaining the proceeds of our own industry. Having agreed to and carried out this act of simple justice, no one will hold, can hold, land for profit. He must use or abandon it. The abandoned estates will then be available for our brother now landless, hopeless, degraded. Then, and only then, can we preach Jesus to him.

We are many members in one body. Which of us can be hurt and not bring hurt on the rest? In this sense, in the sense of sharing in suffering, the oneness of industry is perfect.

—James T. Barnard, in Hamilton Templar.

reprinted in The San Jose Letter, June 27, 1896

Young Men and Their Opportunities - 1896 and today

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.

The mathematical law that shows why wealth flows to the 1%

The mathematical law that shows why wealth flows to the 1% | Alok Jha | Comment is free | The Guardian.

This is not the first time I've commented on suggestions that the Pareto principle tells us that extreme inequality just can't be avoided.  See http://lvtfan.typepad.com/lvtfans_blog/2008/03/the-8020-rule-.html

I alternately find it amusing and very sad that commentators reason from such observations to "gee, there's nothing wrong with our structures!  It is just a law of nature!"

No! We've set things up so that a relative few benefit greatly from the value of natural resources, and another (likely overlapping) group* benefit greatly from the results of federal, state and local spending on infrastructure and services, and then we consider it a "mathematical law" that 1% of us get such a large share of the pie!

*I refer to the owners of urban and suburban land, well-served by infrastructure and a myriad of services, many of whom make more from land value increases than they do from their labor.  An acre of Manhattan land can be worth 50,000 times what an acre of ordinary agricultural land is worth -- and its owner didn't contribute any more than anyone else to that value!  Great fortunes are based on such "activity."

And rich people's useful idiots bless such analyses and give them a gloss of "scholarship."

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

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

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

WHO ARE THE CRIMINALS?

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

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

I.    WHO ARE THE CRIMINALS?

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

II. FRENCH ARISTOCRACY OF PRIVILEGE.

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

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

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

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

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

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

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


III. NEW YORK ARISTOCRACY OF PRIVILEGE.

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

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

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


IV. ROBBERY OF MASSES BY CLASSES.

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

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

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


V. NATURE AND EXTENT OF ROBBERIES.

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

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

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

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

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

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


VI.   HOW TO STOP THE ROBBERIES.

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

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

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

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

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

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

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

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

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

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

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


VII.   THE CRIMINALS.

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

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

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

Wealth Concentration data

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

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

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

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

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

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

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

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

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

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

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

Or, viewed another way:

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

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

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

Thomas Shearman wrote, in 1889, as follows:

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

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

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

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

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

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

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

0-0-0-0-100

I have a family member who, when Herman Cain says "9-9-9," plays a sound bite of another voice shouting "nein! nein! nein!"

Georgists have a better proposal for how we ought to fund our common spending.

• 0% tax on wages
• 0% tax on sales
• 0% tax on corporate profits
• 0% tax on buildings and equipment
• 100% recovery of our commonwealth

This probably raises several questions in your mind:

• what is "recovery of our commonwealth"?
• how will it affect me?

Our commonwealth includes the value of land -- not the improvements made by the present or previous owner, but the value of the site itself, which is created by the gifts of nature; by the investment of the local, state and national communities in public goods and services (including most "pork"); by the presence of the community and its economic activity.  While good farmland may be worth $5,000 or $10,000 per acre, depending on climate and proximity to markets, suburban residential lots might be $35,000 to $1,000,000 -- or far more! -- per acre, and an acre in midtown Manhattan can be worth $250,000,000 or more.  The landholder doesn't create that locational value.

Our commonwealth includes the value of ecosystem services.  It includes the value of electromagnetic spectrum (the airwaves which most people would agree rightly belong to the American people, not to corporations).  It includes the value of water, particularly fresh water for drinking and water for irrigating crops and for corporate use.  It includes the value of government-granted privileges.  It includes the value of geosynchronous orbits -- those parking spots in space for satellites whose owners and customers would not want to see crashing into each other.  It includes the value of landing rights at busy congested constrained airports, such as LaGuardia or JFK, particularly at their rush hours.   It includes the value of scarce on-street parking in congested cities.  It includes the value of nonrenewable natural resources extracted from below the earth and the oceans, for 200 miles beyond our land borders.  It includes a whole range of other similar things.  

As you look at that paragraph, compare it to the 0-0-0-0 list above, and notice that it collects upfront certain values, and leaves the rest to those who produce.   It is direct taxation rather than indirect, and one could reasonably argue that it isn't even really taxation; rather it is more in the nature of a user-fee.

It is Natural Public Revenue.

Once one has sat with this idea for a while, it seems quite unnatural to permit the value to continue to accrue to private individuals, or to corporations publicly or privately owned, or to entities other than the community as a whole!

Recall how concentrated wealth is in the US: The 2007 SCF [the Federal Reserve Board's Survey of Consumer Finances] reported that aggregate net worth is "distributed" as follows:

• Top 1% of us have 33.8%
• Next 4% of us        26.6% [cumulative: 60.4%]
• Next 5% of us        11.1% [cumulative: 71.5%]
• Next 40% of us      26.0% [cumulative 97.5%]
• Bottom 50% of us    2.5%

Recall also that the Forbes 400 families are specifically and intentionally omitted from the SCF, and that Forbes estimates that they represent 2.5% of aggregate net worth. So add that 2.5% to the numerator and denominator.  And note, as Michael Moore did, that it is very similar to the value of the Net Worth of the bottom 50% of us.

And it seems quite unnatural to tax wages, and sales, and corporate profits, and buildings at all before we've fully collected Natural Public Revenue.

Will Natural Public Revenue be sufficient to meet all the needs of all levels of government? 

Quite possibly not, at least today when we are so reliant on a social safety net because current conditions have kept a significant share of our people from providing well for themselves.   But I regard it as altogether possible that within a generation or two, it could be quite sufficient, in part because it would have the effect of redistributing some of the wealth which today is pouring into the pockets of a relative few of us.

How much of corporate profits are coming from (quite legal) privatization of the value of natural resources, the value of being able to get away with polluting air, water and soil, and the value of other privileges which corporations -- public and private -- are used to enjoying?  One of the interesting findings in the SCF is that the value of privately held businesses [BUS] actually exceeds the value of publicly held ones [EQUITY] in household wealth -- and the value of both is highly concentrated:

                                    EQUITY          BUS              

[value, billions, 2007] $13,694.3    $14,893.7

• Top 1%            36.0%            62.7%
• Next 4%          30.5%            25.5%
• Next 5%            5.5%            12.4%
• Next 40%         19.6%             6.0%
• Bottom 50%       1.5%             0.4%

Source: http://lvtfan.typepad.com/lvtfans_blog/americas-wealth-distribution-2007-wealth-concentration-part-1-of-3.html, lines 19 and 28

Consider, too, how much more of this value the Forbes 400 have!   These two categories represent 21.2% and 23.1% of aggregate net worth held by the rest of us -- a total of 44.3%.  Most of the 2.5% is likely in these two categories.  I'll leave the math to you.

Frances Willard, anti-poverty activist

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

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

A few quotes:

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

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

source: NYT, 1895-06-20

from What Frances E. Willard Said:

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

and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Who made the earth?
God.

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

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

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

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

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

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

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

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

To be continued.

---

Oxford Observer, Volume VIII, 24 July 1897

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

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

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

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

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

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

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

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

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

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

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

THE RIOTS

THE RIOTS.

Bryan Kavanagh, in Australia, writes,

The rioting in England is indefensible, but how to understand it?

I’ve mentioned several times throughout these blogs that the rent of land represents community.  However, although land and natural resource rent is community-generated, less and less of it has been captured back for public revenue over the last forty years.  Thereby, a sense of a community has been lost.

That’s because it has become fashionable to privatise the rent of land and natural resources in the misbegotten belief that ‘user pays’ and increased taxation is preferable to the public capture of publicly created resource rents. It is largely privatisers of our natural resource rents who’ve been able to put about this self-serving idea successfully. And they’ve sold it well to governments.

The cumulative effect of the process over forty years has been to widen the gap between rich and poor. This now vast divide is well documented, but the role of rent has been kept invisible.

Right wing shock jocks consider the private leeching of natural resource rents by private interests is respectable employment and, unable to think through the natural consequences, they’re flabbergasted by London’s street riots.

The rising of the hun in the city is obviously a function of poverty and dispossession. Feeling disenfranchised and disconnected, these predominantly lower class youth exhibit their hate for a system that keeps them down and often unemployed whilst bank CEOs receive their multi-millions.  Unlike many of us, the rioters see the game is rigged and their frustration has spilled over into aggression and excess.

This excellent article shows the rent-seeking process is alive and well in India.

High Salaries: Are they earned?

Questions about the sources and rightness of high salaries, particularly in sectors of the economy in monopoly positions or able to skim wealth from the productive economy, are not new.  Here's an editorial from the October 14, 1905, issue of "The Public:"

The envious policy holder

It is perhaps quite natural for policy holders in the Mutual Life to be indignant upon learning that their president gets a salary of $150,000 a year; that his son's salary is $30,000; and that his son-in-law's commissions have amounted to $932,823 since 1893 -- about $75,000 a year.  But let these policy-holding creatures beware.  There is good professorial and priestly authority for saying that indignation like theirs springs from envy, and is the mark of a covetous mind.  Is not the laborer worthy of his hire?

Professorial and priestly authority ... hmmm ... Have you seen the documentary film "Inside Job" yet? (It comes out on DVD in a couple of weeks, I have in mind.)   Have you read Mason Gaffney and Fred Harrison's 1990 book, "The Corruption of Economics"?    Does the phrase "rich people's useful idiots" ring a bell?

A check of an inflation calculator shows that the $150,000 salary referenced for 1904 (paid to the president of a mutual life insurance company!) equates to $4.2 million in 2011.   This onger article comes from the following issue of The Public, the October 21, 1905, issue.  $100,000 then equates to $2.8 million in 2011.    The FIRE sector -- Finance, Insurance, Real Estate -- has been skimming the cream for a long, long time.

MAXIMUM SALARIES.

We have become accustomed of late years to the contemplation of enormous salaries.

The payment of such salaries is sauctioned upon the pretext of the equivalent value of the recipient's services. If a protest against the payment of a hundred thousand dollars a year to the president of a mutual insurance company is offered, the answer is made that the rare qualifications demanded in the manager of such in enormous and complex business not only justify but necessitate the payment of such a salary. "The office demands the highest ability, and a hundred thousand dollars is none too much for that."

Defenders of the high salary sometimes make comparisons between a particular salary in question and certain other salaries of equal value, or salaries somewhat less but attaching to positions of less responsibility, under the impression that such citations establish the equity of their cause. And what is of vastly greater and more portentous significance—the general public, though perhaps doubting, yet not knowing how to answer, suffers the case to go by default.

Yet to the clear thinking man who has a comprehensive knowledge of fundamental economic law, the question presents no difficulties, and the verdict will be promptly and emphatically adverse.

-----

In the common field of wage labor, so called, the arbitrament of competition, though it does not indicate the absolute value of theservice rendered, nevertheless does determine, with some approach to equity, the relative values.

True, competition is not free even here; some wages are artificially advanced. But the discrepancy is insignificant in comparison with the difference between, say, the $8,000 salary of a judge and the $150,000 salary of the president of an insurance company. Some carpenters may receive 30 percent higher wages than some other carpenters of equal capacity; but some salaried men receive 1800 percent more than others of equal capacity!

Yet the claim that such enormous salaries are necessary in order to secure the services required, is equivalent to asserting that the salaries are competitive A very little reflection should expose the absurdity of that claim.

President Alexander, of the Equitable Assurance Society, received a salary of $100,000. With whom was he in competition? Did he ever have a chance to get such a salary in any other connection? Will he ever have another chance?

Mr. Paul Morton has succeeded Mr. Alexander, as being fitter for the place, at a reduction of $20,000 in salary. But if the salary were competitive, Mr. Morton being conceded to be much the better man for the place, would have received an advance, instead of a cut.

Of course, in this particular case, the real reason of Mr. Morton's voluntary acceptance of the reduced salary was that the United States public was in no mood to be trifled with at the moment. Mr. Morton, and everybody else, knew perfectly well that a considerable part of the $100,000 salary was graft, pure and simple, and as the ostensible purpose of his selection for president of the company was the elimination of its scandalous excess of graft, he wisely began where the permanent graft was greatest—in the president's salary.

But the salary still is $80,000. Is it an equitable salary? Or (to get away from this particular case, which I have cited only as a means of illustration), are the notoriously large salaries justified by the services rendered by their recipients?

No. And that they are not is easily demonstrated.

----

If any individual is entitled to higher pay than another, it is because he renders greater service to society than that other. The interposition of the employer between the workman, for instance, and the public does not alter the case. The most efficient group, including employer and employes, will outstrip the less efficient in the competition—that is, in service to the public—and will, as a group, receive cominensurately a greater reward.

The law holds, either as to the individual or the group of individuals. The question of reward does not depend upon the amount of an individual's product, but on the amount that he imparts. He must get his reward by exchanging his product for the product of others; and therefore in order to get more than his competitors he must impart more.

That would be the case if the principle of competition were universally free to act. And the moment that you exempt an individual from the law of competition you thereby concede his inability to command an increased reward without such exemption. Else why exempt him? By exempting him you help him to an increased income; an increase which he could not get without such help, and which, therefore, he does not earn, but receives by special privilege.

Since, then, naturally—that is, under purely competitive conditions—increased reward comes only from increased service to society, it follows that under such conditions an exceptionally high salary would indicate a general rise in the level of social conditions; and that a large number of very high and frequently advancing salaries would indicate a very much improved and frequently rising general standard of living, reaching down to the lowest level of wage-earners.

I repeat that the rapidly rising standard of living would embrace the common laborer. This is the most important fact of the whole problem. The laborer's wage is the criterion of general service value. All advance in income starts from the wage-level of Common Labor. All advance in service-value, therefore, starts from the service-value of Common Labor. The test of alleged exceptionally high service-value, is, therefore, the condition of the Common Laborer.

It follows that if the exceptionally large incomes now prevailing (whether these incomes are in the form of $100,000 salaries or of $1,000,000 profits), are earned, then the condition of Common Laborers generally has risen by leaps and bounds within the last few years.

But statistics prove that in the United States the cost of living has increased beyond any advance in wages. The conclusion is inevitable, therefore, that large incomes exceed the recipients' earnings.

How much do these incomes exceed earnings? No one can tell. The fact of paramount importance for our consideration in this connection is that the great incomes are indisputably beyond the effective influence of those natural laws which tend toward social equity.

The individual laborer's wages are modified by the wages that his fellow consents to work for. The wages of the mechanic bear a manifest competitive relation to the wages of common labor. The profits of the green-grocer, the draper, the teacher, etc., all are competitively related to the wage rate of common labor. Only through exceptional service to those below, can those above maintain their positions in the competitive field.

But there is no comparison whatever between the common-laborer wage and the hundred-thousand-dollar salary. There is no natural relation between them. The wages of the common laborer are the just compensation for valuable service rendered—minus the laborer's enforced contribution to the incomes outside the influence of competition. The great incomes are, at best, in small part compensation for valuable service rendered—plus the maximum of graft that special privilege is able to extort from the occupants of the competitive field; and. at the worst, they are, in their entirety, graft, pure and simple.

---

What should be the maximum salary, or the individual income of whatsoever name?

It should be just what a man can get, under conditions of universal freedom of competition, in a world where natural opportunities are free to all men. Abolish all special privilege, and the man of high abilities would earn his greater compensation as the just reward of benefits imparted to the whole body of society.

Under such conditions all society, including the humblest servitor, would rise in affluence in proportion to the increase in productivity. Which is to say that if our productivity should increase as fast in the next 40 years as it has in the last 40, the poorest class would be ten times as affluent as now, plus its hitherto withheld equity in the current product of today.

Today, the difference between the extremes of income measures the difference between the opportunities of individuals. Abolish all forms of special privilege, and the difference between the extremes of income would measure the difference in the social service of the individual recipients, and the maximum income would be the just reward of the largest contributor to the sum of human welfare.

EDWARD HOWELL PUTNAM.

Justice, Order -- what do we value?

As we watch the people of various countries in the world seeking a new order in their societies, this 110 year old article caught my eye.

"ORDER" MORE PRECIOUS THAN JUSTICE.

Drastic legislation against anarchists will be a feature of the present session. All the big men who are anxious to pose as friends of "order" are rushing to the front with revolutionary suggestions for the suppression of one of the symptoms of social disease. No statesman is heard of who offers a constitutional remedy. Even the president, it is said, will preach the gospel of suppression. It is assumed by all these great men that "order" is more precious and more easily secured than justice. Yet our fathers did not think so. They did not hesitate to plunge the country into disorder for the sake of a principle. They defied the constituted authorities, they assaulted the king's representatives, they threw a cargo of tea into Boston harbor, they unfurled the flag of revolt and they waged a war for seven long years in assertion of their right to disregard order where it involved injustice. This is the point which our anarchistic friends of order ignore. They will not admit that they deny that there is any social injustice which breeds social disease and such manifestations of it as we have lately witnessed. It will be easy to pass laws for the suppression of anarchy. But these laws will not suppress it. They will only serve to intensify the frightful conditions which are breeding it. They will serve only to push the country farther along toward a despotism of pelf. And the inspiration of this legislation is not a love of liberty and a hatred of wrong; it comes from those who are profiting by wrong and who are in deadly fear of the plain people who are their victims. The drag-nets to be thrown out are not to catch the red anarchist alone. He is not the occasion of fear. The people to be caught are those who dissent from things as they are and who protest in orderly ways against robbery and injustice.—Johnstown (Pa.) Democrat of December 3.

from The Public, DECEMBER 28, 1901.

I had to look up "pelf:" Money, esp. when gained in a dishonest or dishonorable way.

I appreciated some of the phrases: 

• suppression of the symptoms of social disease;
• social injustice which breeds social disease
• despotism of pelf
• the inspiration of this legislation is not a love of liberty and a hatred of wrong; it comes from those who are profiting by wrong and who are in deadly fear of the plain people who are their victims
• The people to be caught are those who dissent from things as they are and who protest in orderly ways against robbery and injustice

And then the word "order" caught my imagination, in the way it is used in "Pen's Parade" -- see an entry a bit further down this page.  Orderly, indeed.

Sharing the burden of the cost of providing public services

Here's another from a 1926 issue of Tax Facts, a California-focused, business-focused, Single Tax monthly.  While I find the intended focus of the article spot on, what caused me to share it here was the horse-grist-stone analogy in the final paragraph.   

A SURE THING

Buy real estate in Southern California, says the real estate editor of the Los Angeles Times. Use common sense in making the purchase. Hold on to the property. It will make you independent and your children wealthy.

Fifty-nine years ago Alonza E. Horton bought 960 acres for $265, think of it, at the rate of 27 cents an acre. That . property today is the heart of the San Diego business section. It is worth something like $50,000,000.

The editor goes on to say that since Mr. Horton bought his 960 acres of land at 27 cents an acre millions of people have come to Southern California to live, and the same inducements that brought them will bring millions more. "So don't delay," the editor says, "but buy Southern California real estate while you have the opportunity." And he adds; "It is the fellow with the foresight and the decision to back his jugdment that gathers in the shekels."

This is the counsel of the go-getter. Southern California is an attractive place. Many people have come here. There are indications that many more people will come in the next few years. All these people must have land upon which to live, to do business, and to raise crops. They may bring with them all manner of goods and supplies, but they must use the land that is already here.

Hence, buy that land now, says the realtor, and sell it or lease it to those who come after. To the man who comes to Southern California next year, fix the price a little above the price of this year. Next year add again to the price; the year after, increase it again, and so on, always adding all you dare, short of an amount that will drive the builder away. This is the way the "fellow with the foresight and the decision to back his judgment" reaps the wealth of soil and climate that nature supplied in such perfection. When Mr. Horton came to San Diego in 1867 he bought land at 27 cents an acre. But the man who wants to use that same land today must pay fifty thousand dollars an acre.

This is the law and custom. We must have permanent possession, in order to secure the best use of land. But is there any reason why we should tax alike lands that increase in value so fabulously, and buildings and goods that deteriorate with age?

Some governments do not tax all property alike. Pittsburgh, Pa., taxes machinery and goods not at all, and taxes buildings at one half the rate of land. Mr. Moody, the far-seeing assessor of San Diego, taxed buildings at less than half the rate of land, until he was enjoined by the court. His policy was very popular with the people — business men and residents — excepting a grouchy land owner who evoked the aid of the courts.

When the assessor was compelled to follow the letter of the law there was great distress among the builders of San Diego. Men had built larger and finer buildings because the taxes were lighter on improvements than on land. So great was the burden when the court ruled that they be taxed alike that efforts were made to have the legislature legalize the practice of the far-seeing assessor.

It will come. What has been done in Pittsburgh can be done in San Diego, Los Angeles and San Francisco. It may take time. For years the countryman balanced his grist on the horse's back by putting the meal in one end of the sack and a stone in the other. One day it occurred to him that he could secure the same result by dividing the meal — and save the horse the weight of the stone.

Realtors are merely human when they advise people to buy land on speculation. It is their business. And the man who buys land, and lets it lie idle, while labor and capital build up the community around it, he, too, is human, and is acting within the law.

But what shall be said of the voters who control the laying of taxes? Are they as careful in looking into the tax laws as they are in watching their business affairs?

In the old days when government was simple and taxes were light it did not so much matter, but now it is different. There is hope. The voters will learn to divide the meal, and save the weight of the stone.

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

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

Brer Fox an’ Brer Rabbit

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

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

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

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

Playing the Game

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

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

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

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

Financing the Subway

Under our present system of taxation the wages of the worker are taken to run the city by the tax on the home being put in your rent. The increase in land-values that would run the city goes to the land speculator. Example and Proof:

Suppose the people build a twenty million dollar subway. The land increases twenty million dollars in value; the increase would pay for the subway, but it goes to the land-speculator and your wages are taken to pay for the subway by a tax on the home which is put in your rent.

 

-- from The Single Tax Review, March-April, 1909

 

And 100 years later, we're still financing subways from revenue sources other than Land Value Taxation.  Slow learners, aren't we?

 

Progress, Charity, -- and Justice

Two thoughts for the day, both from the January-February, 1909, "Single Tax Review."

 

To be satisfied with things as they are is to believe that progress is at an end.

 

Charity that is a substitute for justice is a loveless charity.

 

Think of the latter one when you see the bumper sticker "practice random acts of kindness."  Random acts of kindness are wonderful, but they aren't a substitute for active seeking of a more just society for all.   Nor is charity to the poor a substitute for examining and correcting the structures which impoverish so many people.

What Tolstoy Taught: The Great Iniquity

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

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

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

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

"Nice horse," said I.

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

"Then why do you sell it?"

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

"From whom do you rent?"

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

"What are the terms?"

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What Tolstoy Taught: Human Rights

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

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

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

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

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

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

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

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

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

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

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

The single tax is a remedy for all these evils.

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

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

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

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

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

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

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

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

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

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

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

 

David Cay Johnston: Call Their Bluff, Mr. President

129tn0933.pdf (application/pdf Object). (courtesy of Paul Caron's taxprof.typepad.com blog)

I commend the whole article to your attention (it runs 3 pages). But I'll focus on a few paragraphs which particularly intrigue me.  DCJ begins,

Will President Obama cave on yet another of his campaign promises, this time by giving in to Republican demands to extend all of the temporary Bush tax cuts? The president signaled this on his Asia trip when he said his principal concern was retaining the middle-income tax rates.

Republican congressional leaders have said they will let all of the Bush tax cuts expire unless the president bows to their demand that the top 3 percent of Americans be included in any tax cut extension.

Obama should call their bluff. 

I don’t think the Republicans are so stupid that they would let all the Bush tax cuts expire if they cannot continue tax cuts for billionaires and the affluent on all of their income. But let’s assume that the Republican leaders on Capitol Hill are that dumb, or so beholden to the antitax billionaires funding their campaigns, that they would force universal tax increases.

skipping ahead,

The Republicans cannot pass any legislation the Democrats choose to block. Further, the Republicans have no chance of overriding a veto, which requires a two-thirds vote of those present in both houses. The Republicans control the House, but they have only as much power to enact laws as Obama and Senate Democrats give them.

More important than any political gain, however, is what calling the GOP bluff could do to get our nation back on the path to prosperity and to stop policies that are pushing us into economic disaster, thanks in huge part to the Bush administration’s combination of revenue-losing tax cuts, wars, and wild spending.

By calling the Republicans’ bluff, Obama can get us talking about taxes and the future of America, instead of protecting what the richest among us already have.

The president could speak about Wall Street handing out record bonuses this year — an estimated $144 billion to a relative handful of people, many of whom get richer by destroying wealth, including assets of state and local government pension funds whose losses we have to make up for with more taxes.

Those bonuses, by the way, are about 2.4 times expected Wall Street profits.

How about a presidential lecture on entitlements focused on Lloyd Blankfein, whose firm’s bad bets taxpayers paid off at 100 cents on the dollar? The Goldman Sachs boss whines about making only $9 million last year because of his ‘‘sacrifice’’ and plans an extra-big payday this December to make up for last year.

The president could change the terms of our economic debate by talking about how much the vast majority props up many of those at the very top, starting with Blankfein. He could tell people about the trillion dollars a year of tax favors for corporations and the rich, as documented by the Shelf Project. (For the article, see Tax Notes, July 5, 2010, p. 101, Doc 2010-13081, or 2010 TNT 129-4.) Obama should explain how soak-the-middle-class and sink-the-poor policies damage economic growth.

Obama could also talk about how America has stopped being number one in many other categories because of tax policies that are hollowing out our nation’s economy and destroying the commonwealth on which private wealth building relies.

I am an admirer of DCJ, appreciate his two books, and look forward to his third -- but I don't think he yet sees the half of it!  (And need I say that none of our current parties do either?)

Skipping ahead again:

Calling the GOP’s bluff would let the president raise the issue of whether we want to cut Social Security and Medicare benefits so Peterson and his peers can have even more. Is Peterson’s use of a multimillion-dollar helicopter just to avoid the summer traffic between Manhattan and his Hamptons mansion enough? Or should we all pay more so he can buy a new helicopter?

The president could explain that the tax system helps Peterson’s billions float on a sea of tax credits, tax breaks, and tax deferrals. Obama could read to people from 1950s newspaper stories about old ladies eating cat food. The president could stop in at food banks where families who worked hard and played by the rules were crushed by the machinations of Wall Streeters.

He could talk about how a single working person making the median wage of just over $26,000 paid nearly a third larger share of her income in federal taxes than the top 400 taxpayers, who each made almost $1 million a day in 2007.

And Obama could tell taxpayers about all those people with billion-dollar annual incomes who legally pay no current income taxes, while the rest of us get dinged before we get paid. Let me play speechwriter for Obama on this one:

The Republicans took away your tax savings, every penny of it, but first they made sure that hedge fund managers will not have to pay any taxes this year unless they choose to.

Hedge fund managers make billions of dollars each year, but they get to delay paying their taxes for years or even decades — and then pay taxes at less than half the rate that other highly paid people must pay.

Do these hedge fund managers build factories?

Do they create software or new technologies?

Do they create the jobs America needs?

No! They are speculators, speculating with borrowed money.

The Republicans want to cut your Medicare and cut your Social Security.

Now if that’s what you want, then I urge you to support the Republicans. But if you think the highest-paid workers in the history of the world — people who can and often do make a billion dollars in a year — should pay taxes, pay their taxes in full, and pay them now, then you need to show your support for my policies.

If you want your tax cuts back, you need to  stand with me. You need to petition, to demonstrate, to call and write to your representative and senators, telling them this kind of favoritism has got to stop and stop right now.

I'm glad to see that DCJ is calling attention to this particular form of speculation -- skimming the cream off the economy without producing anything.

Recall that Joseph Stiglitz made remarks to this effect, speaking in July at the University of Queensland in Australia:

... moneylenders have been skimming 40 percent of the profits from companies that actually make and produce things. His big point was that this is not really the role of the financial sector. The financial sector's job is to support economic growth, not cripple it. 

"Finance is a means to an end," he said. "The lack of balance between the financial sector and the economic sector was actually the real problem in this economic crisis (NOT the real estate bubble)."

I've not heard of Stiglitz saying this where the American media might catch on, but appreciate his willingness to state it elsewhere.

How do we encourage the sorts of business activity which create jobs, create housing which is welcoming and affordable for people at all points on the income and wealth spectra?  By getting our incentives right, and by straightening out what we tax, what we don't, and the rates at which we tax each.

A 2007 OECD study compared some of the commonly-used tax bases for their effects on economic growth, and concludes that the personal income tax is an inferior tax.  What does it endorse?  Interestingly, the conventional property tax!  Those who read this blog regularly know that the conventional property tax is an unfortunate marriage of two taxes with very different effects -- one quite desirable, and the other largely negative in its effects.

Elsewhere, I came across this table:

Distributional Effects of Allowing All Expiring Tax Provisions to Expire, 2011
	Increase in Federal Taxes
Income Category	Millions of Dollars	Percent
Less than $10,000	117	1.0
$10,000 - $20,000	3,721	19.9
$20,000 - $30,000	11,654	20.8
$30,000 - $40,000	12,869	14.1
$40,000 - $50,000	11,238	10.6
$50,000 - $75,000	26,705	9.2
$75,000 - $100,000	28,517	9.8
$100,000 - $200,000	62,309	10.6
$200,000 - $500,000	26,871	8.7
$500,000 - $1 million	10,620	8.3
$1 million and over	32,708	11.0
Total, all taxpayers	227,330	10.4
Source: Joint Committee on Taxation (July 30, 2010

If I am reading the table correctly, it says that while the folks in the $1 million plus income category would experience an 11.0% increase in their federal taxes, those in the $10,000 to $20,000 range would see a 19.9% increase, and those in the $20,000 to $30,000 range would have a 20.8% increase in their federal taxes.  Admittedly, these are small numbers -- I assume that they exclude social security and medicare payroll taxes, which are much higher than federal income taxes for perhaps 75% of us.    But does it make sense to increase income taxes on those whose incomes are sufficiently low that they likely spend virtually 100% of what comes in by twice as much as the income taxes on those who have plenty of discretionary income?

We need better taxes.  Search this page for the OECD study, or search for "canons of taxation" on the wealthandwant.com website.  Smart taxes are smart.  Dumb taxes are dumb.

 

The Case Plainly Stated

I stumbled across this document in a little book which runs to 24 pages, from 1887.  Those with an interest in Alabama history, particularly as it relates to taxation, might find that it helps explain how the 1903 constitution came about -- whose interests it sought to protect.   Consider it, too, in light of our current economic situation -- too few jobs, lots of income and wealth concentration; not enough credit available to afford housing or commercial sites.     These problems can be solved, but not in the ways we've already tried.

 

The Case Plainly Stated
By H. F. RING

PREFATORY NOTE -- This address originally was delivered to the United Labor Organization of Houston, Texas, in 1887. It appeared in full the next morning in the Houston Daily Post, and afterwards in The Standard, published at that time in New York by Henry George. Mr. George then issued it in tract form, giving it the name of "The Case Plainly Stated." Many editions of it have since been published from time to time in this country and in Europe and Australia, and it is generally regarded as one of the clearest brief statements extant of the philosophy of land value taxation as taught by Henry George in his famous "Progress and Poverty."

MR. CHAIRMAN:— The land question is simply a question as to how the use of the bounties of nature shall be best regulated and controlled. By bounties of nature I mean the coal beds, the mineral deposits, the land — all those natural elements which were not created by human industry, but which Nature has freely and abundantly provided for the use and enjoyment of all the children of men; and I propose to show how the right of capital and. labor to use these natural elements should be regulated by the government*, so as most to conduce to the happiness and well-being of mankind.

* The word "government" as used in this presentation of the Single Tax refers to the tax levying power as vested, not alone in the federal, but also and even primarily in the state, county, and municipal governments.
It is probable that a complete application of the Single Tax will be reached through its gradual adoption at first in cities, counties and states, before it is substituted for tariff and internal revenue taxation.

I am a Single Taxer, and a discussion of the land question by me can be nothing more than a mere attempt to expound the teachings of that great master of the subject, Henry George.

George, at the outset, calls attention to the marvelous improvements in the arts and sciences, the discoveries, inventions, and labor-saving machines which, within the past 100 years, have so immensely increased the productive powers of the human race. Is it not a moderate estimate to assume that on an average the labor of one man today, with all these labor-saving inventions, will produce as much of the comforts and luxuries of life as the labors of four men would a hundred years ago? And does it not follow that the average workman of today creates, by each day's labor, four times as much wealth as the average workman did a hundred years ago? George teaches that if the workman of today, on an average, creates four times as much wealth as the workman of a hundred years ago, then the services of this workman of today are four times as valuable to society; then why should not his wages of right be four times as great? Why should he not be four times as independent? Why should it not be four times as easy for him to make a living and support his family in comfort and decency?

Will any one presume to assert that this is in fact the case? On the contrary, is it not just about as hard for the poor man to make a living today as it ever was? Does he not dread the loss of a position today just as much as he ever did? George asserts that labor-saving machinery really ought to lessen the burdens of labor, to make it easier for the laborer to live, and in fact, to lighten his toil. But alas, from some apparently mysterious cause, — a cause which many comfortably well-to-do people insist is one of the unfathomable mysteries of Divine Providence, — what George claims should rightly result from inventions does not result from them. And still we are all the time making new discoveries, and year by year increasing, by means of new inventions, the productive powers of working men; yet, with the increase of population, the lot of those who produce all this wealth seems to be becoming more precarious, less independent and more and more wretched.

Who denies that under the present social system, wages tend to fall irresistibly to the point at which the wage-workers can barely subsist? This is called the iron law of wages, and all the strikes conceivable can only temporarily, and but fitfully, arrest this steady tendency. For so long as unemployed men compete for employment against the employed, wages cannot permanently advance. The worker may create quadruple the wealth, but he is not permitted to retain any more of it as his share.

WHO GETS THE WEALTH?

Now, where does this wealth go — this wealth which we now produce so much more easily and in such vastly greater quantities than ever before? What becomes of it? Who gets it? Why is it that in this age of wealth-producing and labor-saving machinery, poverty as abject and hideous as ever before seen in the history of the world abounds and increases in our midst? What is the cause of the so-called iron law of wages? Henry George has discovered it. He has pointed it out, and he has shown us the remedy. He has demonstrated beyond a doubt or question that it does not result as a fatal necessity from the nature of things, but that it is a result of violation of natural law, of a refusal on the part of society to recognize the inalienable right of every citizen of access to the bounties of nature within the territory of his country on equal terms with every other citizen of that country.

Let me now give you a short lesson in the elements of this new political economy.

Three factors enter into the creation of every conceivable kind of wealth. By wealth we mean any material thing produced by human industry which gratifies human desires. These factors are land, labor and capital. Wealth in a civilized community is produced only by means of a union or partnership between land, labor and capital. Labor does the work, capital loans the tools, and land furnishes the natural elements on which, and out of which all material things resulting from human industry are created. In speaking of land in the new political economy we never include improvements or anything which is the result of human toil. We simply mean the opportunities which land and the elements within it afford for the employment of capital and labor — we mean the raw elements as they lie on or in the bosom of the eartli, untouched by the hand of man.

Now, as before remarked, the product of land, labor and capital is wealth, and after it is produced, it is divided among these factors entering into its composition. A certain portion of it, called rent, goes to land, either directly in the form of rent or in the form of interest on the selling price of the land or of the coal bed, or whatever it is; another portion of it, called profit or interest, goes to capital for the use of tools which capital has furnished, and the balance left, after land has been paid rent and capital has been paid interest or profits, goes to labor as wages for the work which labor has done, including the labor of superintendence.

MEANING OF RENT.

Now what does rent signify as used here? Rent is the price paid for the privilege of access to the raw material — for the mere privilege of getting hold of something not created by man, on which and out of which labor and capital can produce wealth. This rent may be paid periodically, or may be paid in a lump in the form of purchase money. In either case the result will be the same. Is it not clear that in the division of wealth after it has been produced by this partnership between land, labor and capital, the more land gets for rent the less there will be left for capital and labor? Is it not quite as plain as A B C that the more it costs capital and labor to get hold of these natural elements, the coal beds, the mines, the water fronts, the land — the gifts of nature which a kind providence has provided for the equal use and enjoyment of all — the less there will be for labor and capital to divide between them?

In the new political economy we must never confuse land with capital. One is never the synonym of the other. Land, as before stated, is simply the natural opportunity, exclusive of improvements or anything done to it by man. Capital is something that has been made by man, like a machine for instance, which is useful in the production of wealth. It is wealth used to produce more wealth.

LABOR AND CAPITAL PARTNERS.

But someone asks: Suppose the capitalist who is using the coal bed or using this natural opportunity, whatever it may be, is also owner of it. Where then does your partnership between land, labor and capital come in? We answer just the same as before. A sum equal to the interest on the market value of the coal bed (independent of the machinery, excavation work, etc.) is in such cases a factor of rent. The owner, in addition to profit or interest on his capital, as before defined, must also take from the wealth produced a sum equal, approximately, to interest on the market value of the coal land, otherwise he would sell out and quit. It is evident that the more money the owner is obliged to invest in purchasing the coal bed, for instance, the greater must be the sum which he takes out of the wealth produced to cover interest on that investment, and hence such interest money is simply rent paid for the use of a natural element, for the privilege of access to one of the bounties of nature. Therefore, is it not equally plain in this case that the more paid for this privilege of use, the less will remain out of which labor can get wages?

A few years ago we read in the newspapers of a great boom in the vicinity of Birmingham, Alabama. We were exultingly told that the lands containing coal beds and mineral deposits in northern Alabama had gone up in value from $75,000 to $50,000,000 in the space of six years. What does this signify? It means that when capital and labor shall attempt to utilize these coal beds and mineral deposits, when capital and labor shall unite together, the one to furnish the tools, the other the labor, with which to produce wealth out of this raw material, then will a set of landlords step forward and block the enterprise with a demand for $50,000,000 for the mere right of access to these free gifts of nature, or in lieu of it the payment of $3,000,000 a year as tribute money, that being the interest of $50,000,000 at six per cent.

There lie the coal beds and mineral deposits untouched by man, fresh from the hands of the Creator, intended by Him, if He is the just, benevolent Being whom we have been taught to worship, for the equal use and enjoyment of all His children, and yet our laws say that capital and labor must pay a few forestallers $3,000,000 a year for the privilege of applying the hand of industry to these elements.

And after this blackmail has been paid, how much will there be left for the wages of labor? The answer is, just as little as labor can ordinarily subsist upon. Why? Because this monopolization of the gifts of nature going on, not only in northern Alabama, but everywhere else, enables capital to drive a hard bargain with labor. For this reason, and this alone, they can't deal with each other on equal vantage grounds. Suppose labor objects and says to capital: "I'll not accept the pittance you offer." Capital replies: "All right, go elsewhere." And so labor starts out to get work for himself, and what does he find? Here he is, living in a country capable of raising food for ten times its present population, and he finds four-fifths of the land untilled or but partially cultivated. He finds four-fifths of the coal beds and mineral deposits unused. He finds vacant land and unused lots on every side. He goes to New York City even and he finds there within its corporate limits almost one-third the area of that city vacant, unoccupied, and unused, although there are miles and miles of tenement houses, in which men and women and innocent children are packed and crowded like maggots, as though there wasn't ample room in the city for the comfortable housing of every human being in it. He finds unused natural elements all around him wherever he goes, sufficient to give employment and support in abundance to tens of millions of happy families.

But now suppose labor attempts to make use of any of these unused natural opportunities? Suppose he concludes to go to work for himself upon a piece of vacant land in the suburbs of a city, for instance, where labor could be applied to the greatest advantage. What happens? An individual comes along and waves a title deed, and orders him off the premises. He finds that all these unused natural opportunities are owned by individuals and claimed as private property. He finds himself frustrated at every point. He finds that he can't go to work anywhere without paying blackmail to the owner of some natural element for the mere privilege of working and so he strikes back to northern Alabama and takes off his hat to Capital and bows very low and says: 'Please, sir, give me a bare living and I will be your slave."

And that is about all that he does get, and that is all he ever will get under the present system of land ownership, though you may strike and boycott and potter about graduated land taxes, graduated income taxes, and graduated nonsense until doomsday.

THE GREAT PARASITE.

With advancing population the greater becomes the demand for natural opportunities and the higher the prices which can be extorted for the privilege of using them. As population increases, the town lots, the coal beds, the mineral deposits, the water fronts, the land, go up in value, and so goes up also the amount of tribute money which labor must pay for access to them, for the privilege of employment. The more of the products of industry which go for the payment of this constantly increasing tribute, the less and less will grow the share allowed the laborer and the more dependent and the more wretched will his lot become.

Here in Houston today, suppose Enterprise has $50,000 to invest in the paper mill business, a sum barely sufficient to put up the building, buy the machinery and carry stock. He finds a beautiful site for his mill on the banks of the bayou. It is a vacant lot. The hand of man has never been applied to it, and it stands there now just as it stood when the Indian roamed over the site of this city. The owner of that block, however, thinks he can make Enterprise pay him $20,000 for the privilege of giving employment to labor on this natural opportunity — this piece of ground. That is the price, and if he can't get it today he will get it when the city grows a little larger. But Enterprise says to him: "I have only $50,000 capital, all of which I shall need in my business." The land owner answers it is not his lookout, and so Enterprise turns away checkened and baffled, and the mill is not built.

CAUSE OF DULL TIMES.

And so it is everywhere. Wherever we find a portion of the vacant surface of the earth which could be utilized by capital and labor, and which affords an opportunity for human toil and enterprise, there we find a human vampire with a paper title in his hand warning off labor; and that vampire must always be placated by the payment of blackmail before the wheels of industry can begin to turn.

Need we wonder that these wheels turn slowly, and that they are always getting out of gear; that we are always talking about dull times; that men are always out of employment and always hunting for work, regarding it as a favor even to be allowed to work; that we are all the time growing too much cotton, when millions of human beings have only one shirt to their names; that we are producing too much food, when half the population of the world is insufficiently fed; that carpenters are out of work, when half the people are not comfortably housed; shoemakers wanting work and millions needing shoes? How could it be otherwise, when labor is compelled to beg for work in the midst of limitless unused opportunities for work, on which opportunities, however, sit these human vampires, these dogs in the manger, waving labor back with their paper title deeds?

AN ILLUSTRATION.

Now let us go back for a moment to that partnership between land, labor and capital. For illustration, suppose the wealth produced by the partnership to be created by the application of capital and labor to those coal beds and mineral deposits in northern Alabama, valued, as we have seen, at $50,000,000. In the division of wealth produced we have shown how, say six percent of this $50,000,000, or $3,000,000, must go to land as rent. Or, in other words, $3,000,000 a year must be paid to land owners directly as rent or interest on purchase money for the bare privilege of utilizing these gifts of nature. Now, in the division of wealth produced, why is labor entitled to any portion of it? Clearly because labor's industry has contributed to its creation. Why is capital entitled to any part of it? Because capital has furnished labor with tools with which to develop the mineral deposits. The capitalist who owns the tools can trace his title back to the creator of them, to some individual or set of individuals whose industry produced them and from whom he purchased or inherited them. The title, then, of both labor and capital to a portion of the wealth produced from these mineral deposits originates in human industry, and it is a sacred title. Now then, why should the land owner get any portion of this wealth, to produce which capital has supplied the tools and labor has done the work? This owner claims the right of making capital and labor pay him interest on $50,000,000, or $3,000,000 a year, for the mere privilege of access to this raw coal and raw ore. Ought we not to scrutinize most carefully his right to extort this immense tribute? And if he can show no natural and moral right to claim it, does not society countenance the robbery of labor in permitting him to do so? Where does his title originate?

We find that six or seven years ago he paid someone who claimed to own the land in which these mineral deposits are found $750,000 for the raw natural element for which he now demands $50,000,000. Was this additional value of $49,250,000 in six years produced by his industry? Was it produced by the industry of any previous owner of these natural elements? Did it cost $49,250,000 to discover these mineral deposits? We trace back his title a little further, and we find that perhaps a hundred years ago it originated in a grant to John Jones from the government — that is to say, the people who inhabited this country a hundred years ago and who constituted the government said: "We will divide the land and we will give John Jones this particular tract for his private property."

But did these people create that land and the coal and iron in it? Can it be shown that they had any better right to it from the Almighty Creator than the people of this generation have? Was the earth intended by the Heavenly Father for one generation to dispose of forever, or as an abiding place for all generations? Was Thomas Jefferson right or wrong when he wrote: "The earth belongs in usufruct to the living; the dead have no right or power over it?" By what authority could the people living here a hundred years ago, long since dead and gone, confer upon John Jones, also dead and gone, a right which would enable John Smith today, by tracing a paper chain of titles from him, to extort from capital and labor a tribute of $3,000,000 a year for the bare privilege of getting to that coal and iron and making it useful to mankind?

Who dares to blaspheme the name of the Almighty Ruler of the universe by saying that the coal and iron were not intended by Him for the equal use and the enjoyment of all His children — the humblest babe born today in a garret equally with a child of the proudest duke who ever lived?

MAN IS A LAND ANIMAL.

Is not man a land animal? Can he live without land? Can he any more rightfully be deprived of access to land than he can rightfully be deprived of life itself? Can he any more rightfully be compelled to yield up to a forestaller, a mere owner of land, a portion of the fruit of his industry for the privilege of getting hold of the raw material elements than he can rightfully be compelled as a slave to yield up to a master a portion of the fruits of his industry? To compel him to do so is as much a robbery of labor in one case as in the other. Why then is not the humblest babe that God sends into this world naturally and by inalienable right entitled to access to land on equal terms with all his fellow human beings?

ORIGIN OF PROPERTY RIGHT.

Mind, when we say access to land we do not include access to improvements on land, or access to anything produced by human industry, a title to which can be shown originating in human toil; we simply mean access upon equal terms to the free bounties of nature as they lie upon the kind bosom of mother earth, untouched and undisturbed by the hand of man. What I produce by my industry is mine. What I obtain by exchanging the products of my industry for the products of another's industry is mine. What my father or my grandfather produced by his industry was his, and if he has given it to me it is mine.

In all these cases human industry is the origin of property right, and property rights originating in human industry must be held sacred, else there would be no incentive to human effort. Do not the values produced by the individual belong to the individual producing them? Do not the values produced by the community belong to the community producing them? Is there anything wrong, immoral or communistic in this ideal? And yet this is the sum and substance of the Henry George philosophy.

Take the case of the vacant block on the bank of the bayou which Enterprise wanted for a paper mill and could not get. Fifty years ago it was worthless. Now labor must pay a tribute of over $20,000 to the so-called owner for the privilege of using it. Whose industry has put $20,000 of value on that piece of vacant ground? Not the industry of the present owner, nor the industry of any former owner, because no man has ever done a stroke of work upon it. That value of $20,000 has been placed upon the land by the common energy and enterprise of the entire community. Since the community has produced that land value why does it not belong to the community? Why has not the community the same rights to the value it creates as the individual has to the values which he individually creates?

THE REMEDY.

How shall this derangement of the wheels of industry, this blackmail upon enterprise, this robbery of labor, this eager and fatal competition among laborers for employment, this slavish fear of the loss of a situation in the midst of abundant unused opportunities for employment — how shall this curse which our present land system has fastened upon the productive industry of the country, be removed? Simply by doing justice; by being honest; by recognizing in our laws one of the inalienable rights of man; by recognizing in every human being, in every generation, the present as well as the past, an inalienable right of access to the bounties of nature on equal terms with every other human being.

How shall this right of access on equal terms be secured? Simply by making every individual who claims a right to the exclusive possession of a tract of land pay in the form of a tax approximately what the use of that tract of land is worth, exclusive of all improvements on it or anything done to it by the hand of man, and by abolishing every other form of taxation. Take the rent of land for public use instead of taxes.

WILL SIMPLIFY GOVERNMENT.

Some one asks: "Will not this proposed change vastly increase the functions of government and immensely add to the number of government employees?" I reply no. On the contrary, at least two-thirds of the present army of revenue collectors and tax gatherers will be dispensed with, and the remaining one-third will collect this single tax on land values at one-third the expense now incurred in the collection of national, state, county, and municipal taxes.

Another inquirer asks: "Will not the new system offer abundant opportunities for corruption and partiality in fixing the amount of this tax annually to be paid for the exclusive use of a piece of land? And how do you propose the amount of the tax shall be determined?" It will be determined by the same law of demand and supply which now determines the amount of tax under the present system. The single tax will be fixed by the same machinery of an assessor and a board of equalization which fixes it now. For instance, under this system a piece of property on Main street rents for $5,000 a year. Interest at the prevailing rate on the building alone, added to the annual cost of insurance, repairs and caretaking, and a sum sufficient to provide a sinking fund for renewals amounted to, say $3,000 a year. The landlord is then collecting the difference between $3,000 and $5,000, or $3,000 for the use of this naked earth. That is to say, he is collecting $2,000 a year for the use of something never created by man, to which all are by natural right equally entitled, and which owes its rental value of $2,000 a year exclusively to the common enterprise and energy of the entire community.

This is the sum which, under Henry George's system, would be turned over to the government in the form of a tax for the common benefit of the community who collectively have made the use of this land worth $2,000 a year.

Here an interested friend anxiously inquires: "But if the landlord has to pay this tax of $2,000 a year for the use of the land, will he not take it out of the tenant by raising his rent to $7,000?" No, for the landlord's charges now all he can compel the tenant to pay. Suppose he tries to. Suppose he says to his tenant: "You must now pay me $7,000 a year." What happens? Just what happens every day now. If the tenant can do no better he pays the increase. But now, mark you, when the landlord goes to pay his tax what happens then? Why the board of equalization says to him, you have received $7,000 a year rent for the use of improvements worth only $3,000 a year. You are therefore collecting $4,000 a year instead of $2,000 for the use of the naked lot, and you will therefore pay the city or state $4,000 a year for the privilege of the exclusive use of the ground instead of $2,000 a year as heretofore. Now what has the landlord made by jumping up the rent? Nothing. What would be made by thus jumping up the rents under the present system? Everything. Under which system would landlords be more apt to force up rents?

DETERMINING THE TAX.

Another way by which the board of equalization under the George system would determine the amount of tax to be paid for the privilege of the exclusive possession of a tract of land, and which would also compel landlords to collect from their tenants and turn over to the government in the form of a tax the full value of the use of the land, would be from observation of the prices which real estate brought in the market. But note, at this point some smart fellow jumps up — and he is likely enough to be a newspaper editor — and vehemently protests, saying: "Why, sir, the taxation of ground values plan does not propose to allow any exclusive ownership of land. It demands that the government own it all and rent it out or divide it up into 60,000,000 or 70,000,000 little bits, or do something of that kind with it, and here you are talking about lands being bought and sold under the Henry George system. Why, man alive, you don't know what that system is!"

Now, Mr. Editor, or Mr. Who-ever-you-are, let me say to you that in your ignorance, or in your indifference to the sufferings of your fellowmen, or in your desire to pander to the greed of monopoly, or to the timidity of capital, you may say what you please; you may misrepresent as much as you please for the purpose of bringing odium and contempt upon the cause; you may call it what you please — state ownership, state landlordism, ownership in common, communism, nihilism, anarchism or anything else; but the fact, nevertheless, remains that, under the just and righteous land system which we are trying to explain, the land will continue to be bought and sold under the same form of paper deeds, precisely as it is bought and sold today. It will continue in precisely the same way to pass to devisees by will and to heirs by law of descent and distribution. The right of control, of exclusive possession and dominion over a piece of land and of the free and exclusive enjoyment of all improvements on it, will in no way be abridged or disturbed. When you buy a lot on Main street today worth $10,000 with a building on it worth $10,000 more, your deed recites a consideration of $20,000. Now when you buy this same property under the George system, the only difference in the whole transaction will be that your deed for it — assuming that the price accords with the market value prevailing at the time of your purchase — will recite a consideration of only $10,000, and $10,000 is all that you will then pay for the property. You will pay nothing for the land. After you have bought the property you will pay yearly in the form of a tax to the government, approximately the full market value of the (yearly) use of it — which will amount to the annual rental value of the land, and as the man from whom you purchased had to pay the government the same annual rental value, you will consequently pay nothing, or approximately nothing*, to him for the land itself when you purchase the property. You thus save an investment of $10,000 in dirt; instead of such investment you will pay for the common benefit of the community, including yourself, what the privilege of the exclusive use of that spot of earth is worth — nothing more, nothing less — and that is simply what you ought to pay. The $10,000, which, under the present system, you are compelled to bury in a bit of earth, you will have left you with which to increase your business; and if you do increase your business with it, and add another story to your building, no tax gatherer will come around and impose an additional fine upon you for doing something with your money which gives employment to labor.

* There will, no doubt, be instances where the desire of an individual to get and retain possession of a certain piece of property, will cause him tooffer a bonus over and above the market value of the improvements.

 

NO PROPERTY IN LAND.

Thus, under the single tax system, land would be sold and would change hands as it does now, but it would only bring in the market approximately the value of the improvements on it. If land in any locality should get to selling for considerably more than the value of the improvements on it, this would be a certain indication that the parties using the natural elements in that neighborhood were not paying for the benefit of all the people what the use of the same was worth, and so a board of equalization would put the tax up. As population increases the value of the use of land increases, and with it, under the George system, the revenue from this tax on land values will increase, and thus the entire people who collectively produce this increasing value will get the benefit of the values collectively produced by them. As it is now, the increase in the value of land, which amounts to several billions annually in the United States, four-fifths of which is increase in the value of city and town lots and mineral deposits, goes to a comparatively small number of individuals who do no more to produce these values than any other members of the community.

TAXATION ABOLISHED.

Another doubter puts this objection: Under the George system you would make the owner of a lot on Main street, with an improvement on it worth $10,000, pay as much tax as the owner of a similar lot adjoining, having a building on it worth $50,000. What justice is there in that?

Let us see. Take away the improvements and these two lots are of the same value — that is to say, the value of the use of both lots for ordinary business purposes is the same. Suppose it is $300 a year. Now, the man with the $50,000 improvement collects from his tenant ten percent on his $50,000, or $5,000. He also collects $300, the value of the use of the lot, making in all $5,300. The man with the $10,000 improvement also collects ten percent upon the valuation of his improvement from his tenant, of $1,000. He, too, collects $300 in addition for the use of the lot, making in all $1,300. Now after both have paid the government $300 apiece for the privilege of the exclusive use of these lots, each will have left ten percent upon the capital invested, and why should one be entitled to any greater percent upon the capital invested than the other?

The fact is, that under this system there will be no such thing as taxes. Taxation, as we now understand it, will be abolished. The revenue derived by the government from requiring all who use a natural opportunity to pay into the common treasury what the use of that opportunity is worth, if it is worth anything at all, will be more than sufficient to enable the government to dispense with every species of taxation. As it is now, when you pay your taxes, you are simply robbed of a portion of the fruits of your industry, for which you do not get, directly, any equivalent. Under the proposed system, when you pay your single tax on land values you will get directly a full equivalent for every dollar paid. You will get the privilege of the exclusive use of a tract of land for what that privilege is worth.
 

ACCESS TO UNUSED LAND.

If this system were adopted what would become of the vacant lots and lands, the unused coal beds and mineral deposits, the unoccupied water fronts and water privileges over which human vampires now stand guard, retarding enterprise and driving off labor? They would become absolutely free. No one could afford to hold them and pay taxes on them. The vampires would turn them loose. Land speculators and land sharks, instead of trying to grow rich by forestalling labor and capital and thus preying like devouring beasts on their fellowmen, would turn their talents to better account. Wherever labor could find an unused lot or coal bed or mineral deposit or unused tract of land, there labor could go to work and employ itself without being required to invest a dollar in the purchase of a right of access to the natural element, without being compelled to first make terms with a dog in the manger claiming it as private property and holding it for speculative purposes.

If that vacant natural opportunity were situated near a center of population, or were of a character to bestow peculiar money-making advantages upon the persons using it, this advantage would create a demand for it, and this demand would regulate in the manner already pointed out the amount which labor and capital would pay for the use of it, in the form of a tax for the common benefit of all. If that vacant opportunity, for instance, were a tract of land four or five miles from this city, it would have few advantages to make the use of it at present peculiarly valuable. Why? Because there is so much vacant land of the same character near it, the use of which is equally valuable, that no one would give a bonus, as it were, for the use of that particular tract. Labor would, therefore, at first get the use of that land for nothing. It would have no taxable value at all until all the other vacant land similarly situated was put into use. Under this most just and equitable system the taxable values of land would be confined almost exclusively to the cities and towns and the coal and mineral deposits. Where people congregate, there land has value. In New York City alone, capital and labor today pay to a few thousand land owners, in ground rent alone, exclusive of rent paid on improvements, for the bare privilege of living and doing business, tribute money amounting to hundreds of millions annually, a sum almost equal to the expense of carrying on the government of the United States. It is in these great centers of trade and commerce that land has its greatest value; it is here that land values are mostly found and from these centers nine-tenths of the revenue of the government from this tax on land values would be derived.

FARMERS WOULD BE BENEFITED.

If the George plan were suddenly put in force today, not only would all farmers be relieved from direct and indirect taxation, not only would farmers participate in common with all others in the universal and uninterrupted prosperity which would result from removing the obstructions which needlessly hamper and clog enterprise, but probably three-fourths of the working farmers in this country would pay no land tax at all. Why? Because with so much vacant or but partially cultivated land as there is here today three-fourths of the farmers would have no taxable value at all; and all who are counting on the farmers of America being so foolish as not to see how they will be as much benefited by a just and righteous land system as any other class will certainly be disappointed.

EFFECT ON FARMS.

"Yes," says our farmer friend, "but you propose to confiscate the farmer's land." Let's see about that. You are a farmer owning say a hundred-acre farm, situated like a majority of farms, in a neighborhood where for every acre of land in cultivation there are two or more acres unimproved or but partially improved. Your farm is worth under the present system, say $2,000. A hundred acres of this unimproved land adjoining it of the same quality is held by some speculator at $500. Your tax on your hundred-acre farm is $10 a year, the speculator's tax on the hundred acres of land adjoining of equal value, exclusive of improvements, is $2.50 a year — one-fourth as much as yours. You give employment to labor on your land, and thereby add to the prosperity of the community. The speculator excludes labor from employment on his land, and thereby retards the prosperity of the community. Why should you be taxed any more for using your hundred-acre tract, and giving employment to labor on it, than the speculator is taxed for holding in idleness a tract of equal value and preventing labor from using it? Why should not the speculator pay at least as much tax for the privilege of excluding labor from his tract as you have to pay for the privilege of employing labor on yours? Have you hurt anyone by turning up the wild sod and building fences and houses and putting $1,500 worth of improvements on your land? If not, why should you be fined for it by having your taxes increased?

Where our plan is adopted you will have no taxes at all to pay until this vacant land around your farm is put into use. Until then no land value could attach to your farm, and the tax which, with increasing population, you would ultimately be required to pay, would seldom equal and rarely, if ever, exceed that which farmers now pay on the improvement valuation. Assuming that you spend say $600 a year on your family, then under the present system your taxes, direct and indirect, and the toll which the merchants take for collecting indirect taxes, amount to at least $100 a year. You may not know it, because an indirect tax always fools a fellow paying it. You will be relieved from all these taxes, but best of all, men who are now idle and who can't buy what you raise will all be at work, and not only that, but their wages will be high enough to pay good prices for what you raise. It is true that under the new system you could only sell your place for $1,500. Still, with this same $1,500 you could buy just as good a place from some one else. The purchasing power of your farm, when it comes to buying another farm, would not have been reduced. Do not your interests as producer or a laborer vastly exceed your interests as a land owner?

LANDLORDISM AND GOVERNMENT

Now, coming back to the elements of the new political economy, some one says: "What difference does it make to the workmen whether labor and capital pay this ground rent to the individual or to the government, since, according to your theory, it must be paid all the same?" In the first place, if it is paid to the individual none of it ever comes back to labor and capital unless value received is paid for it; so far as labor and capital are concerned, it might about as well be cast into the sea. But when it is paid to the government in the form of a tax on land values it does come back to labor and capital again in the form of relief from every species of taxation, direct and indirect.

Again, the amount that Enterprise would pay the government for the privilege of access to the natural elements would be less under the single tax than is now paid individuals for this privilege. Under the land value tax the prices could not be advanced by monopolization of these elements, as is being done now.

But best of all, and by far the most glorious result that will flow from the establishment of a just and righteous land system, is that it will enable the wealth creator to stand erect, presenting to capital an unterrified front.

Return for a moment to the coal beds of northern Alabama and imagine the Henry George system adopted. Labor now again objects to the terms offered by capital, and again capital tells him to go. And again labor goes forth hunting for work. But how different he finds the aspect of things. He finds the same unused natural elements, the same unused coal beds and mineral deposits, the vacant lots and lands, but he no longer finds a fellowman sitting upon every vacant opportunity for work and waving him off. They have vanished. They have gone to work themselves. He finds every unused opportunity for labor, wherever it may be, absolutely free. Not a dollar of capital need be invested in buying a natural opportunity, in paying for the privilege of work. When labor went forth hunting work before, he not only had to ask capital to pay for the tools, but also to pay, usually a greater sum, to some forestaller, in addition, as blackmail, for the privilege of access to a natural element.

This will all be changed. It won't take near as much capital to start enterprises as it did, or in other words, to give employment to labor. In fact, labor could then take even an axe and hoe and find plenty of vacant opportunities on which he could make a living without having to bury himself in a wilderness to do it. All this makes him feel independent and enables him to bargain with capital for employment on equal vantage grounds.

MONOPOLY IS PROFITABLE.

Some time since a large manufacturing firm in Massachusetts adopted the eight-hour system. After trying it a year they gave it up and went back to the ten-hour system. The general manager said they could only make five percent profit on their investments by requiring only eight hours' work, and that unless they could make a bigger percentage than that, they would not be bothered with the management of the business — they would put their money into town and city lots, because that species of property would certainly enhance in value as much as five percent annually, and that, too, without any trouble to the owner, and so it is everywhere. Now, is it not absurd to expect to reduce the rate of profits with which capital will be content below this steady percent of increase in the value of town and city lots, by any combination of labor, or by any legislation which falls short of restoring these land values to the people who collectively create them?

Suppose you have $10,000 today. The best and safest thing you can do with it is to invest it in town lots in or near some growing town. Ten years from today, unless the George theory becomes generally understood, the lots will be worth $20,000 and you will have drawn to yourself $10,000 worth of wealth for which you have given no equivalent. You will simply have robbed the labor of the country of $10,000. But now suppose ground values to be appropriated to the public use by taxation. What are you to do with your $10,000? You would not buy vacant lots now; there is no speculation in them. The tax which you would have to pay for the privilege of excluding capital and labor from the opportunities for employment which vacant lots afford, would be too heavy for you. In fact, you couldn't even loan on land alone, because land alone will have no selling value in the market. The result is, that unless you let your money lie idle and so lose interest on it, you will be compelled to invest it so as to give employment to labor. You must put it into buildings, into machinery, into manufactory stock, into farm implements, into some channel where it will be active and where it will afford employment to labor.

Not only must you do this with your capital, but every other capitalist must do the same with his capital. Capitalist thus must bid against capitalist, since capital can only increase by calling labor to its aid and giving it employment.

Under the present system the rich can grow richer without calling in the aid of labor, without giving employment to labor. They do so by buying space and monopolizing land.

Under the present system, as wealth accumulates, the wealthy seek to invest in land, to get control of natural elements, and get into a position from which to blackmail labor, thus becoming an obstacle in the way of the production of more wealth.

Under the better system, however, wealth could not thus be made to set up an obstacle to the creation of more wealth, or, in other words, to the employment of labor. It can then only obtain a profit by investing in lines of enterprise which give employment to labor.

Under which system will the demand for labor be greater? Under which will earnings be higher?

The November U.S. Senate Elections

Every election year, 1/3 of the seats in the U.S. Senate are up for election.  This year as you vote, consider the content and goals of the television commercials you've been subjected to, from all sorts of directions (beyond the candidates themselves), and remember that a significant portion of the commercials have been enabled by the recent Citizens United decision issued by a Supreme Court dominated by "conservative" justices.  (I commend the article at that link to your attention.  In fact, I'll copy the essay, Corporations, Democracy, and the U. S. Supreme Court, by Mason Gaffney, in below the fold.)

Consider that it is the senators we elect who vote on the Supreme Court nominees presented by the president we elect, and think about who it is that YOU want voting on the next nominee.  Justices can serve for many decades, far beyond the time the average senator is in office.

The person you elect to the Senate will serve for 6 years -- 2 in Obama's first term, and 4 in the term of whomever the American people elect in 2012, aided in their decision-making by the well-crafted and well-funded advertising made possible by the Citizens United decision -- and will likely be voting to fill at least one Supreme Court seat.

Whose interests should they -- the Senators and the Supreme Court nominees -- have at heart?

Do we want people who will seek to promote the concentration of wealth, income, privilege and power -- more and more, to fewer and fewer -- or to promote the interests and prosperity of ordinary Americans?  Be sure you know; your options may not be wonderful, but at least your criteria should be thought out.

 

I commend this to your attention --

Corporations, Democracy, and the U. S. Supreme Court
Mason Gaffney, February 24, 2010

On Jan 21 2010 our High Court shocked Americans by ruling in Citizens United v. Federal Elections Commission that a corporation may contribute unlimited funds advertising its views for and against political candidates of its choice – in practice, the choice of its CEO or Directors. The ideas behind this are that a corporation is a “legal person”, with all the rights (if not all the duties) of a human being; that as such it has a right of free speech; and that donating money is a form of speech. Already K&L Gates, a top Washington lobbying firm, is advising its clients how to funnel money through lobbying groups or “trade associations”. This culminates a long series of actions and reactions (decisions, legislative acts, and electoral results) that bit by bit have raised the power of corporations in American economic and public life. Herein I will take the fall of the corporate income tax as a simple metric of the power of corporations. Nothing about corporations is that simple, however, so I must also touch on other aspects of power.

Some critics react apocalyptically, calling Citizens United a death blow to democracy; some cynically, calling this merely making de jure what is already de facto; some legalistically, saying the Court ruled more broadly than justified by the case brought before it. Supporters, naturally, take this contentedly as righting an injustice of long standing. Some economists would applaud this as a step toward sunsetting the corporate income tax, by electing more candidates beholden to corporate money. Many of them – not all – have been seeking this end for years in their learned journals and op-eds. Even the late Wm Vickrey, otherwise an egalitarian, gave high priority to this change.

This writer does not applaud either sunsetting the tax, or this step. I agree with Joseph Stiglitz that the corporate income tax is mainly a tax on economic rent. That means that a high tax rate does not destroy the tax base. Martin Feldstein, an economist who is as conservative as Stiglitz is liberal, also sees the corporate income tax as a tax on economic rent (JPE 85(2); April 1977, p. 357). It is not the ideal form of such a tax, but it beats any tax on work, or sales of the necessities of the poor, or value-added, or gross sales. Both Vickrey and Stiglitz rate high in the profession and garnered Nobels, so we cannot simply appeal to “authorities”. To prepare our minds, let us review some milestones in the history of corporations, especially in America.

Krugman: Fear and Favor

Op-Ed Columnist - Fear and Favor - NYTimes.com.  Paul Krugman's column today

A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation,” but you’re actually just extras in a remake of “Citizen Kane.”

True, there have been some changes in the plot. In the original, Kane tried to buy high political office for himself. In the new version, he just puts politicians on his payroll.

I mean that literally. As Politico recently pointed out, every major contender for the 2012 Republican presidential nomination who isn’t currently holding office and isn’t named Mitt Romney is now a paid contributor to Fox News. Now, media moguls have often promoted the careers and campaigns of politicians they believe will serve their interests. But directly cutting checks to political favorites takes it to a whole new level of blatancy.

Arguably, this shouldn’t be surprising. Modern American conservatism is, in large part, a movement shaped by billionaires and their bank accounts, and assured paychecks for the ideologically loyal are an important part of the system.

• Scientists willing to deny the existence of man-made climate change,
• economists willing to declare that tax cuts for the rich are essential to growth,
• strategic thinkers willing to provide rationales for wars of choice,
• lawyers willing to provide defenses of torture,

all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultrawealthy families.

And these organizations have long provided havens for conservative political figures not currently in office. Thus when Senator Rick Santorum was defeated in 2006, he got a new job as head of the America’s Enemies program at the Ethics and Public Policy Center, a think tank that has received funding from the usual sources: the Koch brothers, the Coors family, and so on.

Now Mr. Santorum is one of those paid Fox contributors contemplating a presidential run. What’s the difference?

David Cay Johnston spoke to some of this in his writings about the effort to re-brand the estate tax, which affects a tiny fraction of households, as the "death tax," funded by those who would be beneficiaries.  (Remember all that talk about saving the family farm?  Think about that family-owned factory farm in Iowa which produces all those eggs.  That's the sort of entity we'd be protecting.)

Might I encourage you to go read "The Corruption of Economics" by Mason Gaffney and Fred Harrison.  Here's the product description:

Condemning the post-industrial economy to protracted periods of economic failure, this thought-provoking book documents how the integrity of economics as a discipline was deliberately compromised in the United States towards the end of the 19th century. Several chairs of economics were funded at leading universities to rebrand economics to justify unearned income. The tools for this strategy became neo-classical economics, and, unlike classical economists like Adam Smith who described wealth as the product of three factors — land, labor, and capital — the new theorists reduced these to two: labor and capital, thus treating land as capital. This concealed the benefits enjoyed by those in receipt of the rent from land. The effect, the authors reveal, was to deprive professional economists of the ability to diagnose problems, forecast important trends, and prescribe solutions.

The cover material reads,

Henry George championed social justice and economic efficiency so successfully he had to be stopped.  He was.  Here's how:
'With the development of democracy . . . Mind control became the urgent need: neo-classical economics was the tool.' Economics was uprooted from reality and we are all paying the price today."

What comes to mind is that the vast majority of those who learned our/their economics from economists and instructors who only know neo-classical economists become highly useful idiots.

Schalkenbach.org may be your best source, at $16.  And any purchase over $10 gets you a free copy of Henry George and the Reconstruction of Capitalism.

I hope you -- and Dr. Krugman -- will take a look at both.

What is it the plutocrats are protecting?  The concentration of wealth in this country.  If you don't have the statistics top of mind, here's a quick version, from the Federal Reserve Board's 2007 Survey of Consumer Finances, which under-reports the concentration of wealth because it expressly omits the Fortune 400 families, who represent about 1% of aggregate net worth.   

1.  EQUITY (stock in publicly held companies and equity mutual funds, whether held individually, in trusts, in retirement accounts):
2. BUS (the value of privately held businesses)
3. EQUITY and BUS combined

Distribution of Wealth: Stocks, Privately Held Business, and all other, by percentile of NETWORTH
	Value (billions)	Percent Aggregate NETWORTH	Percentile of Wealth Distribution (NETWORTH)					Bottom   95%	Top 5%
			0 to 50th	50 to 90th	90 to 95th	95 to 99th	99 to 100th
EQUITY	$13,694	21.2%	1.5%	19.6%	12.4%	30.5%	36.0%	33.5%	66.5%
BUS	$14,894	23.1%	0.4%	6.0%	5.5%	25.5%	62.7%	11.9%	88.1%
EQUITY+BUS	$28,588	44.3%	0.9%	12.5%	8.8%	27.9%	49.9%	22.2%	77.8%
everything else, including debt	$36,010	55.7%	3.7%	36.7%	12.9%	25.6%	21.1%	53.3%	46.7%
NETWORTH	$64,598	100.0%	2.5%	26.0%	11.1%	26.6%	33.8%	39.6%	60.4%
memo:
HOUSES, net of mortgages	$15,686	24.3%	5.8%	48.3%	12.8%	20.8%	12.2%	66.9%	33.1%
Source: Ponds and Streams, reported at http://lvtfan.typepad.com/lvtfans_blog/ americas-wealth-distribution-2007-wealth-concentration-part-1-of-3.html

How to Increase America's Saving Rate: Rich Americans Save Tax Cuts Instead of Spending

Rich Americans Save Tax Cuts Instead of Spending, Moody's Says - Bloomberg.

Well, from time to time, we hear that Americans aren't saving enough, and sometimes columnists ask for suggestions of how we might increase America's savings rate.

Moody's has provided the answer: cut federal income taxes on the highest income people, and they will save a significant portion of it.   (The question arose because some say that in order to facilitate job creation, we ought to avoid increasing federal income taxes on the portion of taxable income over $250,000 per year.)

If the goal is to produce savings at the median, or at the 25th or 75th percentiles, or at the 10th or 90th percentiles, reducing taxes on the highest-income 2% or so is not going to serve the purpose.   But it will satisfy the "increase America's saving rate" goal.

Before we went into this recent "bust" portion of our 18-year boom-bust cycle, a shocking proportion of Americans lacked sufficient savings to provide even a poverty-line existence for their families for as short a period as 3 months.  (Edward Wolff of NYU wrote the study on this.)   Most of us live paycheck to paycheck.

The notion of saving for a "rainy day," or even of saving to buy one's next car for cash, seems quaint and of-another-era, with so many of us paying more than 40% of our income for housing.  (Yet we don't complain about owing our soul to the company store.  Now it is the FIRE sector we owe.)    And look at the measures we've used to substitute for people's inability to save a 20% down payment on a starter home!

But the best-off among us -- both those who have large amounts of wealth and many of those who receive high wages or high profits on their "labor" (even if their labor consists of reaping that which other people sowed, they do regard it as labor, and sometimes the IRS does, too -- unless they run hedge funds, in which case it gets treated just as if they'd actually invested their own capital in a way a corporation could use to enhance its operations!) -- can and do save and invest.   And clearly this is an aspect of the wedge driven through society which Henry George described 130 years ago, driving some up and the vast majority down.

The wealthiest among us own, and take opportunities increase their holdings of, the corporations -- public and private -- which hold our best land (urban, oil-laden, etc.) and our non-renewable and/or otherwise finite natural resources.  (See "stock ownership" in the tag cloud at left for the data.)  We praise them as if they are somehow self-made, and let them parade about as such, and we gratefully accept their charity -- tulips and swimming holes on Park Avenue -- as if it made up for what they and their ancestors stole from us and ours, and what their children will reap from the labor of our children.   We don't see the structures by which they do it -- we're so used to them that they are, like the air we breathe, invisible to us.   But 120 years ago, most Americans did understand them.  (Explore the free NYT archives, 1880 to 1900, for the name of Henry George, and do some reading.  I suspect even the American history and American Studies majors will be surprised.)

 

Could a Peanut Paste Called Plumpy'nut End Malnutrition? - NYTimes.com

Could a Peanut Paste Called Plumpy'nut End Malnutrition? - NYTimes.com

This is a wonderful story, but it begs the question: after it gets young children in impoverished countries through the critical first few years, will it reduce poverty in any way, or does it leave in place virtually all the structures which impoverish the people of these countries?

Henry George wrote about "the robber that takes all that is left." Plumpy'nut makes sure there is more left for that robber.

The final paragraphs touch ever so lightly on this:

Collins asks, “How are they addressing the need for poor people in Haiti not to be dependent on outside intervention in the first place?”

This question hung, unanswerable, over Salem’s journey through Haiti. Salem went there with a promise to donate a shipping container filled with $60,000 worth of Nutriset-patented products to Partners in Health, the charity run by her friend Paul Farmer. While grateful, the organization still preferred to manufacture its own product, Nourimanba, with the profits accruing to local farmers. But even this program was more a principled exercise than a development strategy. Haiti’s endemic problem of malnutrition wasn’t something you could solve with peanuts. Partners in Health also took Salem on a couple of home visits. At a one-room shack in Cange, a mother presented her 3-year-old daughter, saying she had gained 11 pounds on a regimen of Nourimanba. But the mother complained that there was no help for other serious problems she faced, like the fact that she had no job and the tin roof of her shack leaked.

Out in the hills, down a muddy path shaded by coconut palms, the health workers checked in on a small wooden farmhouse. Two children living there were on a regimen of ready-to-use food — and six were receiving nothing. The older ones watched as their little sister wolfed down an entire cup of peanut paste for the benefit of the visitors. The children’s grandmother, who was looking after them, was asked why malnutrition had been diagnosed in these two and the others not. She said she couldn’t really say, except that there simply wasn’t enough food to go around. There was no foil-wrapped answer to the maddening persistence of poverty. All that existed was a determination to meet the challenge with all the fallible tools of human ingenuity.

 

The fallible tools of human ingenuity.   Perhaps some of that ingenuity could be applied to understanding and correcting the structures which pour the wealth of nations into the pockets of a relative few in each nation.  Those structures are neither "natural" nor "necessary."    Start with reading Henry George -- a couple of his speeches, perhaps "The Crime of Poverty" and "Thou Shalt Not Steal," followed by a recent abridgment of Progress and Poverty.  You'll know more about poverty and its causes -- and what needs to be reformed in order to end involuntary poverty -- than many of the world's "experts," who seek to tweak poverty while not disturbing the status quo -- not rocking any yachts or luxury cruiseships.  Leave more for the robber who takes all that is left, if you will.

George used his ingenuity to understand the structures and to describe them clearly to his readers and listeners.