Land Value Taxation will solve many of the 21st century's most serious social, economic and environmental problems, and promote justice, fairness and sustainability. We CAN have a world in which all can prosper.
Progress and Poverty, by Henry George Here are links to online editions of George's landmark book, Progress & Poverty, including audio and a number of abridgments -- the shortest is 30 words! I commend this book to your attention, if you are concerned about economic justice, poverty, sprawl, energy use, pollution, wages, housing affordability. Its observations will change how you approach all these problems. A mind-opening experience!
Henry George: Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy This is perhaps the most important book ever written on the subjects of poverty, political economy, how we might live together in a society dedicated to the ideals Americans claim to believe are self-evident. It will provide you new lenses through which to view many of our most serious problems and how we might go about solving them: poverty, sprawl, long commutes, despoilation of the environment, housing affordability, wealth concentration, income concentration, concentration of power, low wages, etc. Read it online, or in hardcopy.
Bob Drake's abridgement of Henry George's original: Progress and Poverty: Why There Are Recessions and Poverty Amid Plenty -- And What To Do About It! This is a very readable thought-by-thought updating of Henry George's longer book, written in the language of a newsweekly. A fine way to get to know Henry George's ideas. Available online at progressandpoverty.org and http://www.henrygeorge.org/pcontents.htm
Where Else Might You Look?
Wealth and Want The URL comes from the subtitle to Progress & Poverty -- and the goal is widely shared prosperity in the 21st century. How do we get there from here? A roadmap and a reference source.
Reforming the Property Tax for the Common Good I'm a tax reform activist who seeks to promote fairness and reduce poverty. Let's start with the enabling legislation and state requirements for the property tax. There are opportunities for great good!
A great landholder may legally convert his whole property into a
forest or hunting ground, and expel every human being who has lived
upon it. In a thickly populated country like England, where
almost every acre has its owner and occupier, this is a power of
legally destroying his fellow-creatures; and that such a power
should exist, and be exercised by individuals, in however small a
degree, indicates that as regards true social science, we are still
in a state of barbarism.
— ALFRED RUSSEL WALLACE,The Malay
Archipelago, Chap. 40. Final Note to the book. (1869)
The post below this one, "Mitt Romney's 'Fair Share' " refers to his fair share of the costs of providing public goods.
But perhaps an equally important question is the nature of one's fair share of the output of our economy and the output of the earth. Some of the former output is the result of individual efforts, and one ought to be able to keep that portion. But at the same time we must recognize how much comes from the division of labor, from drawing down on the non-infinite supply of non-renewable natural resources on which all of us today must depend and on which future generations of human beings must rely. Those who draw down more than their legitimate share owe something to the rest of the community. Our wealthiest tend, we suspect, to use many, many times their legitimate share, and the median American likely draws far more than their share, when one considers the planet as a whole.
Perhaps "legitimate" is not the right word here. It refers to what is permissible under current law. (The word gets misused a lot -- see the discussion on "legitimate rape," which seemed to be about the circumstances under which a woman has a right to make a specific very personal, decision, and when it is considered by some to not be left to her and is the province of government, legislators or others.)
What is one's "fair share" of natural resources? America is using a hugely disproportionate share of the world's resources. Are we entitled to it because we're somehow "exceptional"? Because "our" God is somehow better than other nation's Gods? Or do we genuinely believe that all people are created equal, and intend to live our lives accordingly?
Our output of greenhouse gases exceeds our share of the world's population. This is not without consequences for the world, and for peace on earth.
We ought to be re-examining our incentives so that they move us in the direction we ought to be going, which is, to my mind, using less. We can build transportation infrastructure which will permit many more of us to move around with less impact on the environment. We can fund that through collecting the increases in land value that infrastructure creates. We can correct the incentives which cause us to use today's inferior technologies to extract natural resources from the earth in ways which damage the environment, as if ours was the final generation, or the only one worth serious consideration.
Better incentives could reduce, eliminate, even reverse urban sprawl. I refer specifically to land value taxation as a replacement for the existing property tax, particularly in places where assessments are for one reason or another not consistent with current property values -- e.g., California and Florida, parts of Delaware and Pennsylvania which currently use assessments from the 1970s, and many other places where assessments are simply out of whack with current reality!) We should be replacing sales taxes, wage taxes, building taxes with taxes on land value and on natural resources. Most of that value is flowing generously into private or corporate pockets, to our detriment. It concentrates wealth, income, and, of course, political power.
Collecting the rent, instead of leaving the lion's share of it to be pocketed by the rent-seekers, would go a long way to making our society and our economy healthier. Eliminating the privilege of privatizing that which in a wisely designed society would be our common treasure would make our society a better place in which to live, a place in which all could thrive and prosper without victimizing their fellow human beings.
A major theme of the underlying political debate in the United States is the role of the state and the need for collective action. The private sector, while central in a modern economy, cannot ensure its success alone. For example, the financial crisis that began in 2008 demonstrated the need for adequate regulation.
Moreover, beyond effective regulation (including ensuring a level playing field for competition), modern economies are founded on technological innovation, which in turn presupposes basic research funded by government. This is an example of a public good – things from which we all benefit, but that would be undersupplied (or not supplied at all) were we to rely on the private sector.
Conservative politicians in the US underestimate the importance of publicly provided education, technology, and infrastructure. Economies in which government provides these public goods perform far better than those in which it does not.
But public goods must be paid for, and it is imperative that everyone pays their fair share. While there may be disagreement about what that entails, those at the top of the income distribution who pay 15% of their reported income (money accruing in tax shelters in the Cayman Islands and other tax havens may not be reported to US authorities) clearly are not paying their fair share. ...
I have to disagree with the second sentence of this next paragraph. And I think Stiglitz knows better, if he stops to think about it:
Democracies rely on a spirit of trust and cooperation in paying taxes. If every individual devoted as much energy and resources as the rich do to avoiding their fair share of taxes, the tax system either would collapse, or would have to be replaced by a far more intrusive and coercive scheme. Both alternatives are unacceptable.
We don't need intrusive or coercive; we just need to start collecting the lion's share of the rent! Well, I suppose some rent-seekers would find this extremely intrusive -- it intrudes on their habit of self-enrichment by privatizing of what is rightly and logically our PUBLIC treasure, the logical way of financing PUBLIC goods. And Professor Stiglitz is quite aware of the value of natural resources; he may not be quite as conscious of the value of urban and other well-situated land.
Our national recordkeeping doesn't even collect the valuations of land and natural resources on any consistent basis! (One could reasonably argue that this failure-to-measure is a form of corruption!) What we don't measure we can't do anything about. And the powers that be are quite content with how we do things; the benefits accrue to them! And several generations of college-educated people know nothing about the issue, which was well known and widely discussed 100 years ago. (Look into the extensive Single Tax literature and the ideas of Henry George.)
Some more excerpts:
The billionaire investor Warren Buffett argues that he should pay only the taxes that he must, but that there is something fundamentally wrong with a system that taxes his income at a lower rate than his secretary is required to pay. He is right. Romney might be forgiven were he to take a similar position. Indeed, it might be a Nixon-in-China moment: a wealthy politician at the pinnacle of power advocating higher taxes for the rich could change the course of history.
But Romney has not chosen to do so. He evidently does not recognize that a system that taxes speculation at a lower rate than hard work distorts the economy. Indeed, much of the money that accrues to those at the top is what economists call rents, which arise not from increasing the size of the economic pie, but from grabbing a larger slice of the existing pie.
Those at the top include a disproportionate number of monopolists who increase their income by restricting production and engaging in anti-competitive practices; CEOs who exploit deficiencies in corporate-governance laws to grab a larger share of corporate revenues for themselves (leaving less for workers); and bankers who have engaged in predatory lending and abusive credit-card practices (often targeting poor and middle-class households). It is perhaps no accident that rent-seeking and inequality have increased as top tax rates have fallen, regulations have been eviscerated, and enforcement of existing rules has been weakened: the opportunity and returns from rent-seeking have increased.
Today, a deficiency of aggregate demand afflicts almost all advanced countries, leading to high unemployment, lower wages, greater inequality, and – coming full, vicious circle – constrained consumption. There is now a growing recognition of the link between inequality and economic instability and weakness.
There is another vicious circle: Economic inequality translates into political inequality, which in turn reinforces the former, including through a tax system that allows people like Romney – who insists that he has been subject to an income-tax rate of “at least 13%” for the last ten years – not to pay their fair share. The resulting economic inequality – a result of politics as much as market forces – contributes to today’s overall economic weakness.
The vacant land belongs to the landless. The simple fact that
the one is vacant and the other landless is of itself the highest
proof that they should be allowed to come together. Alas, what
a crime against nature that they should be kept apart.
— GERRIT SMITH, Smith's Speeches
in the U. S. Congress, p. 247 (1854).
The earth in its natural uncultivated state was, and ever would
have continued to be, the common property of the human race.
As I listen to the 2012 party platforms, I am reminded of what they ought to be focused on, embodied pretty well in this platform from 1886-87.
PLATFORM OF THE UNITED PARTY.
Adopted at Syracuse August 19, 1887.
We, the delegates of the united labor party of New York, in state
convention assembled, hereby reassert, as the fundamental platform of
the party, and the basis on which we ask the co-operation of citizens of
other states, the following declaration or principles adopted on
September 23, 1886, by the convention of trade and labor associations of
the city of New York, that resulted in the formation of the united
"Holding that the corruptions of government and the impoverishment of
labor result from neglect of the self-evident truths proclaimed by the
founders of this republic that all men are created equal and are endowed
by their Creator with unalienable rights, we aim at the abolition of a
system which compels men to pay their fellow creatures for the use of
God’s gifts to all, and permits monopolizers to deprive labor of natural
opportunities for employment, thus filling the land with tramps and
paupers and bringing about an unnatural competition which tends to
reduce wages to starvation rates and to make the wealth producer the
industrial slave of those who grow rich by his toil.
'“Holding, moreover, that the advantages arising from social growth and
improvement belong to society at large, we aim at the abolition of the
system which makes such beneficent inventions as the railroad and
telegraph a means for the oppression of the people and the
aggrandizement of an aristocracy of wealth and power. We declare the
true purpose of government to be the maintenance of that sacred right of
property which gives to every one opportunity to employ his labor, and
security that he shall enjoy its fruits; to prevent the strong from
oppressing the weak, and the unscrupulous from robbing the honest; and
to do for the equal benefit of all such things as can be better done by
organized society than by individuals; and we aim at the abolition of
all laws which give to any class of citizens advantages, either
judicial, financial, industrial or political, that are not equally
shared by all others."
We call upon all who seek the emancipation of labor, and who would make
the American union and its component states democratic commonwealths of
really free and independent citizens, to ignore all minor differences
and join with us in organizing a great national party on this broad
platform of natural rights and equal justice. We do not aim at securing
any forced equality in the distribution of wealth. We do not propose
that the state shall attempt to control production, conduct
distribution, or in any wise interfere with the freedom of the
individual to use his labor or capital in any way that may seem proper
to him and that will not interfere with the equal rights of others. Nor
do we propose that the state shall take possession of land and either
work it or rent it out. What we propose is not the disturbing of any man
in his holding or title, but by abolishing all taxes on industry or its
products, to leave to the producer the full fruits of his exertion and
by the taxation of land values, exclusive or improvements, to devote to
the common use and benefit those values, which, arising not from the
exertion of the individual, but from the growth of society, belong
justly to the community as a whole. This increased taxation of land, not
according to its area, but according to its value, must, while
relieving the working farmer and small homestead owner of the undue
burdens now imposed upon them, make it unprofitable to hold land for
speculation, and thus throw open abundant opportunities for the
employment of labor and the building up of homes.
While thus simplifying government by doing away with the horde of
officials required by the present system of taxation and with its
incentives to fraud and corruption, we would further promote the common
weal and further secure the equal rights of all, by placing under public
control such agencies as are in their nature monopolies: We would have
our municipalities supply their inhabitants with water, light and heat;
we would have the general government issue all money, without the
intervention of banks; we would add a postal telegraph system and postal
savings banks to the postal service, and would assume public control
and ownership of those iron roads which have become the highways of
While declaring the foregoing to be the fundamental principles and aims
of the united labor party, and while conscious that no reform can give
effectual and permanent relief to labor that does not involve the legal
recognition of equal rights, to natural opportunities, we nevertheless,
as measures of relief from some of the evil effects of ignoring those
rights, favor such legislation as may tend to reduce the hours of labor,
to prevent the employment of children of tender years, to avoid the
competition of convict labor with honest industry, to secure the
sanitary inspection of tenements, factories and mines, and to put an end
to the abuse of conspiracy laws.
We desire also to so simplify the procedure of our courts and diminish
the expense of legal proceedings, that the poor may be placed on an
equality with the rich and the long delays winch now result in
scandalous miscarriages of justice may be prevented.
And since the ballot is the only means by which in our Republic the
redress of political and social grievances is to besought, we especially
and emphatically declare for the adoption of what is known as the
“Australian system of voting,” an order that the effectual secrecy of
the ballot and the relief of candidates for public office from the heavy
expenses now imposed upon them, may prevent bribery and intimidation,
do away with practical discriminations in favor of the rich and
unscrupulous, and lessen the pernicious influence of money in politics.
In support or these aims we solicit the co-operation of all patriotic
citizens who, sick of the degradation of politics, desire by
constitutional methods to establish justice, to preserve liberty, to
extend the spirit of fraternity, and to elevate humanity.
Do you imagine that it is by some way of nature that your property has passed from your ancestors to you? Such is not the case. This order is but founded on the simple will and pleasure of legislators, who may have had good reasons for what they did, but not one of their reasons was taken from any natural right of yours over these possessions.
— BLAISE PASCAL (1623-1662), Letter to the young Duke of Roannez,
quoted by Matthew Arnold in Last Essays on Church and Religion, p. 165.
The right of inheriting property is a law of men; it was established for their welfare and can only be continued on that condition. He who, at the beginning of society, staked out a piece of ground, and threw there some seed which nature had spontaneously produced elsewhere, could never have obtained on this title alone the exclusive right of holding the ground for his descendants forever.
— NECKER (afterward Louis XVI's Minister of Finance), Essay on the Corn Laws (1775),
It was in vain anyone repeated, "I built this well; I gained this spot by my industry." Who gave you the boundaries? it might be objected, and what right have you to demand payment of us for doing what we did not require of you? Are you ignorant that numbers of your fellow-creatures are starving for want of what you possess in superfluity?
— J. J. ROUSSEAU, Essay on the Origin of Inequality Among Men, Part II., p. 20.
I can easily imagine a great proprietor of ground rents in the metropolis calling attention to the habitations of the poor, to the evils of overcrowding, and to the scandals which the inquiry reveals, while his own income is greatly increased by the causes which make house-rent dear in London, and decent lodging hardly obtainable by thousands of laborers.
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
Mr. Henry George first formulated this idea, which has grown steadily in favor, in 1879. Single-tax men assert as a fundamental principle that all men are equally entitled to the use of the earth; therefore, no one should be allowed to hold valuable land without paying to the community the value of the privilege. They hold that this is the only rightful source of public revenue, and they would therefore abolish all taxation - local, state and national - except a tax upon the rental value of land exclusive of its improvements, the revenue thus raised to be divided among local, state and general governments, as the revenue from certain direct taxes is now divided between local and state governments.
The single tax would not fall on all land, but only on valuable land, and on that in proportion to its value. It would thus be a tax, not on use or improvements, but on ownership of land, taking what would otherwise go to the landlord as owner.
In accordance with the principle that all men are equally entitled to the use of the earth, they would solve the transportation problem by public ownership and control of all highways, including the roadbeds of railroads, leaving their use equally free to all.
The single-tax system would, they claim, dispense with a horde of tax-gatherers, simplify government, and greatly reduce its cost; give us with all the world that absolute free trade which now exists between the States of the Union: abolish all taxes on private issues of money; take the weight of taxation from agricultural districts, where land has little or no value apart from improvements, and put it upon valuable land, such as city lots and mineral deposits. It would call upon men to contribute for public expenses in proportion to the natural opportunities they monopolize, and make it unprofitable for speculators to hold land unused or only partly used, thus opening to labor unlimited fields of employment, solving the labor problem and abolishing involuntary poverty.
It will be thought an intolerable thing that men shall derive enormous increments of income from the growth of towns to which they have contributed nothing — that they shall be able to sweep into their coffers what they have not produced — that they shall be able to go on throttling towns, as they are well known to do in some cases. It is impossible to suppose that the system will not be vigorously, powerfully, persistently and successfully attacked.
—JOHN MORLEY, Speech at Forfar, October 4, 1897. The Times, October 5, 1897, p. 5, column 3.
The unqualified ownership of land thus established (viz., "in a way which in this age would be regarded as monstrous and corrupt"), enables the land-owning class to reap a wholly unearned benefit at the expense of the general community.
— FRANCIS A. WALKER, Political Economy, Part VI., Chap. 7, Sec. 418.
Instead of putting themselves in this odious point of light, one would think they would wish to let Time draw his oblivious veil over the unpleasant modes by which lord ships and demesnes have been acquired in their and almost in all other countries.
— EDMUND BURKE, Letter to Richard Burke, Works, Vol. VI., pp. 75-6.
Has no one in California figured out that when the calf is deprived of mother's milk, starvation is inevitable?
It has taken 34 years, but it is coming about.
Feeding calves grain, or seaweed, or sunflower seeds isn't as smart as letting it consume its natural food.
Taxing wages, sales and buildings isn't as smart as collecting the lion's share -- calf's share, if you will -- of the land rent for public purposes.
Proposition 13 was designed to make sure that the cows' milk was kept for the Irvines, the big landowners, the commercial property owners, and the longtime homeowners, while providing a diminishing fifth of it to the calf and supplementing with grain, seaweed and sunflower seeds.
The calf's digestive system has blown up because it was deprived of its proper food, and "nourished" with stolen fake food.
Thus fares the land by luxury betrayed, In nature's simplest charms at first arrayed; But verging to decline, its splendors rise, Its vistas strike, its palaces surprise; While, scourged by famine from the smiling land, The mournful peasant leads his humble band, And while he sinks without one arm to save, The country blooms, a garden and a grave.
From the sweat of their brows the desert blooms, And the forest before them falls; Their labor has builded humble homes, And cities with lofty halls. And the one owns cities and houses and lands, And the ninety and nine have empty hands.
There are ninety and nine that work and die In want and hunger and cold, That one may live in luxury And be lapped in the silken fold! And ninety and nine in their hovels bare And one in a palace of riches rare.
— Anonymous, There are Ninety and Nine, Chants of Labor, p.11 (From the Boston Globe.)
"Our progressive and scheming civilization has developed new forms of speculation and new organizations to give power to capital. Corporations have already become more formidable than the government. Law has clothed them with artificial power without placing proper restriction on its selfish and unjust exercise. There is not adequate security against the frauds they perpetrate. Aggregated capital is managed by boards of directors or trustees whose first business is to advance their own individual interests, and then, so far as consistent with it, the interests of the stockholders."
William Phillips: Labor, Land and Law: A Search for the Missing Wealth of the Working Poor (1886), p. 23
ON Sunday, the best climate policy in the world got even better: British Columbia’s carbon tax — a tax on the carbon content of all fossil fuels burned in the province — increased from $25 to $30 per metric ton of carbon dioxide, making it more expensive to pollute.
This was good news not only for the environment but for nearly everyone who pays taxes in British Columbia, because the carbon tax is used to reduce taxes for individuals and businesses. Thanks to this tax swap, British Columbia has lowered its corporate income tax rate to 10 percent from 12 percent, a rate that is among the lowest in the Group of 8 wealthy nations. Personal income taxes for people earning less than $119,000 per year are now the lowest in Canada, and there are targeted rebates for low-income and rural households.
The only bad news is that this is the last increase scheduled in British Columbia. In our view, the reason is simple: the province is waiting for the rest of North America to catch up so that its tax system will not become unbalanced or put energy-intensive industries at a competitive disadvantage.
Over dinner tonight, Milton Friedman's name came up, and I commented that in about 1978 and again in 2006, a few weeks before his death, Milton Friedman called land value taxation the "least bad" tax, but never lifted a finger in the intervening years to help promote it.
The carbon tax is another good, and wise, and just, tax.
How many economists will put their shoulder to getting it enacted?
How many will simply hang out in their ivory towers?
Let’s start with the economics. Substituting a carbon tax for some of our current taxes — on payroll, on investment, on businesses and on workers — is a no-brainer. Why tax good things when you can tax bad things, like emissions? The idea has support from economists across the political spectrum, from Arthur B. Laffer and N. Gregory Mankiw on the right to Peter Orszag and Joseph E. Stiglitz on the left. That’s because economists know that a carbon tax swap can reduce the economic drag created by our current tax system and increase long-run growth by nudging the economy away from consumption and borrowing and toward saving and investment.
What would a British Columbia-style carbon tax look like in the United States? According to our calculations, a British Columbia-style $30 carbon tax would generate about $145 billion a year in the United States. That could be used to reduce individual and corporate income taxes by 10 percent, and afterward there would still be $35 billion left over.
Why on earth should the privilege to pollute OUR air be be given away for free, or for less than the social costs it imposes on us? Who benefits from such a system?
A carbon tax makes sense whether you are a Republican or a Democrat, a climate change skeptic or a believer, a conservative or a conservationist (or both). We can move past the partisan fireworks over global warming by turning British Columbia’s carbon tax into a made-in-America solution.
Yes, ye may fill your garners, ye that reap The loaded soil, and ye may waste much good In senseless riot; but ye will not find In feast or in the chase, in song or dance, A liberty like his, who, unimpeached Of usurpation, and to no man's wrong, Appropriates nature as his Father's work, And has a richer use of yours than you.
Another article from the author of the "Property Rights" article below. It is in the same (1902) volume of The Railroad Trainman.
Who Are the Anarchists? Florence A. Burleigh 1902 The Railroad Trainman
According to the popular idea and the ordinary daily paper, an anarchist is a person who goes about the world with a bomb hidden in each pocket and a pistol in his hand, seeking whom he may devour. By the same warrant anarchism is a synonym for murder or assassination. Especially during these last few months has the subject of anarchism been discussed more or less hysterically by all kinds of people and in all kinds of periodicals. It is well, therefore, to look at the subject calmly, and without prejudice, in order that we may fully understand what real anarchism is, what its upholders hope, or wish to do, and also ask, incidentally, if the real anarchists are in the anarchist camp.
Let me state at the outset that I do not believe that any school of anarchism will ever be possible, even if it were just. No anarchist has ever, to my knowledge, talked for any length of time without admitting the necessity among citizens of some kind of a settlement of questions relating to public policy, even though they don't call it government. No anarchist has ever, to my knowledge, proposed any solution of the land question that did not involve injustice. I, therefore, am not writing from the standpoint of a supporter of the much-maligned anarchism, but from the standpoint of one who likes fair play and a clear understanding of a proposed system of social life which must be reckoned with. Let me say, also, that I number among my acquaintances and friends several avowed anarchists who are conscientious, kind, peace-loving and' thoroughly good citizens — men and women who would, and do, sacrifice much of their own comfort and convenience to help their fellowmen, who deprecate as much as any one possibly can such a deed as the killing of any human being.
That there are anarchists who have used this cowardly, as well as useless way of attempting to abolish government, is true, but that all the advice to murder or all the deeds of murder are done by anarchists is not true.
Many people who are not anarchists advocate the killing of certain classes of people, and to class all anarchists as assassins or instigators of assassination, is as unjust as it is untrue. The unpopular anarchists are usually poor and of a "lower class" of society, and are therefore under the ban whatever they do. The popular anarchists sit in high places and are respected citizens, using the word anarchist in its popular meaning as one who acts contrary to existing laws and not in its strictly correct sense, meaning one who believes in no government. For an anarchist is really one who holds that when all barriers are removed and every one is free to do what seems to him right he will not wish to do harm to any human being; that absolute freedom brings with it the possibility for every one to be kind and just to his fellowmen and that as government to a greater or less degree limits the freedom of the individual it must be unjust in the nature of the case and that it is also unnecessary, as human nature is ever good when let alone.
There are doubtless anarchists who say — as they believe — that a social revolution is coming in this country; a revolution which may or may not be bloody; that it will be brought on by the continued injustice of those in power, and that force will be used by the plutocrats — a belief that is not dissipated by the building and enlarging of armories and militia and such affairs as that at Latimer — and, therefore, the oppressed must be ready to use force in return. But even those who say this advise force only for self-defence. But the belief in a coming revolution is not confined to anarchists, but is shared by men and women of other economic schools, and does not necessarily imply in either case that the revolution will come in any other way than as a natural result of causes. Society is indeed on a wrong basis, and it seems as though nothing but a miracle could save it from a revolution which we pray may be a peaceful one. Men and women of a despised or down-trodden race, or class, are sometimes arrested and punished for acts which are entirely harmless, while those in high places may act entirely in opposition to both statute and moral law and still be looked up to.
A few months ago a poor, deluded, ignorant fellow took the most sacred thing in the world — a human life. What might have been his motive, or whose life it was, is for the moment not essential. Suffice it to say he killed a brother man and gave as an excuse that the deed was done because of a speech he had recently heard from a noted anarchist, which speech had been also heard by a vigilant police and not considered "inflammatory." But immediately after the deed was done there were cries from all classes of people, including followers of the Great Teacher, not only demanding that he be lynched on the spot, and in other ways trying to "stamp out anarchy by anarchy," but calling for dire punishment to be meted out to the woman who had delivered the lecture in question and who was hunted out and imprisoned for a time. The man had committed a crime and was punished according to law, but the woman had committed no crime, yet was threatened with violence from those who professed the highest respect for law. Both of these people belonged to an unpopular class. I am not excusing murder, or even apologizing for it; murder in all its forms, whether done by an ignorant, crazy man, or any one else, whether the murdered be one man or a thousand men, whether done in passion or in battle, Is a terrible crime. I only wish to call attention to the fact that all the defying of law and morals is not confined to the class called anarchists.
At the same time that this tragedy was enacting, Judges were issuing illegal injunctions; negroes were being burned at the stake for crimes which there was no proof they had committed — but their lynchers were "respectable" men — trust companies were evading the laws, and city, state and national officials were breaking laws with impunity.
These examples are given merely to show that in public opinion what is legal and what is not, or what is "anarchy," or what is not, depends upon the person and not the deed. No wonder justice is represented with blinded eyes — to shut out the crimes committed in her name. I do not wish to excuse wrong-doing of any kind, but only to point out the growth of class feeling in this country; the lapse from the fundamental principles of equality upon which our fore-fathers prided themselves.
Rev. John R. Crosser said recently: "I am not afraid that the anarchy on Carroll avenue will ever destroy our institutions. It is too black and ugly. The anarchy to be found on the boulevards is the most dangerous, the anarchy which buys a legislature. Anarchy cannot be put down with laws. We can learn nothing from European countries in this regard, except what not to do. We must be careful not to go too far In annihilating the class of anarchists found on Carroll avenue, lest we injure many others who really have the best Interests of our country at heart."
It is not anarchy, then, which some people are trying to stamp out, but the claim of the oppressed, even though rudely expressed, and roughly comprehended, for equal rights. The only governments which many people know about are those which oppress certain classes and give special privileges to others. The way to "stamp out anarchy" is not to pass stringent laws against allowing anarchists to come to this country or to suppress meetings at which anarchism may be discussed. It is only by discussion that we learn the truth. The way to "stamp out anarchy" is to repeal all laws granting special privileges and to accord equal justice to all men.
Anarchy, whether it be among the avowed anarchists or those who sit in legislatures, or wear broadcloth bought with the lives and sufferings of their fellowmen, can be abolished only by equal freedom and equal justice. No suppression of free speech or laws against the coming to this country of anarchists will ever avail except to increase the number and zeal of those of whom the government would be rid.
But, it may be said: "'Inflammatory speeches' cannot be allowed because as a result someone with a weak mind may be influenced thereby to commit some crime." Is not the reason deeper than that? The spirit of war — of killing — is rampant all over the country. Even Christian ministers advocate killing — not of one man, but of many, when they counsel war and rejoice when the newspapers announce, the murder by their sons and friends of their fellowmen who live in far away Islands.
Louis F. Post says in The Public: "The gospel of strenuous life has been preached from high places. Its ideal was war. This was welcomed for its own sake, as inspiring robust ambitions and giving strength to character. War was described as making heroes, and peace milksops. Throughout this strenuous life there ran rivulets of human blood, and over it there hung the heavy shadow of wholesale murder. It was to be the middle age tournament come again, but with slaughter enough to have turned the stomach of your middle age knight. And in this sanguinary spirit an imperial destiny was working out. The first republic of Asia had been strangled in infancy by the first republic of America. * * * The American republic, turning its back upon its ideals of liberty and peace, was exchanging the substance of world influence for the reputation of world power. * * * In the common mind a spirit of anarchy was being generated in the name and by the methods of the strenuous life."
The official reports state that 100,000 people go insane annually in Italy from hunger, and many are on the verge of starvation all their lives. Italy is creating anarchists by her unjust laws and nothing but a change of laws giving her people a chance to earn a living and to be free will "stamp out anarchy" there. In our own country over 90% of the people possess about 25% of the wealth, leaving the other 75% of wealth for only 10% of the people. Is it any wonder that anarchy is growing among this 90%? It is unnecessary to say that this 10% will do everything in their power to retain possession of their "property," which means, rather, their privilege to tax the other 90%. They will stop at nothing, for they know the power of the masses should they ever realize how great it is and what is the cause of their condition.
We have, then, three classes of anarchists;
first, the poor, despised ones who are preyed upon and hunted down and imprisoned on the least provocation:
second, the rich, respected ones who would indignantly repel the name anarchist, but who prey upon the first kind and make them what they are; who continually oppress them legally and illegally and who hold over them the whip of starvation;
the third class is composed of intelligent, conscientious, peaceful men and women who believe that in the absence of statute law people will not only not wish to injure their fellowmen but will do all they can to assist them; who are opposed to all kinds of violence and are willing and expect to wait for their "good time coming" a long time. No one deprecates more than these people the killing of any human being, whether he be king, president or one of the plain people. They hold human life to be the most sacred thing in the world, unless it be human freedom.
Dewey Beach — The Town of Dewey Beach [Delaware] is marching to the beat of its own drum: Town officials have imposed a fee of $109 to all bands that play in town. No other town in the Cape Region imposes such a law. “This is just a matter of fairness,” said Mayor Diane Hanson. ... Hanson said if her cleaning lady has to buy a business license, it is fair to require bands to buy one as well.
Dewey Beach, Delaware, prides itself on not having a property tax. This forces it to rely on taxes which are far less just and less logical than a simple tax on land value would be -- including a licensing fee for anyone who works in Dewey Beach!
And if one lets one's license skip a year, and then needs it again, one must pay for the year one didn't have a customer there, as well as the years in which one does.
Why? Well, perhaps the explanation is partially related to the fact that one company owns an amazing amount of the land in Dewey Beach, and it is rented out on ground leases which are currently at a very low level -- say, $550 to $650 per year -- and whose end comes in about 11 to 14 years. Many of these lots sell for $600,000 or more, when one comes on the market; those in the ocean block perhaps significantly more. The County last assessed the land in the late 1960s. County taxes on the cottages (excluding the land), which typically sell for $200,000 or less because they are aging and must be removed at the end of the lease, run from $300 to $900 a year (and the county tax is mostly for the school district). In neighboring Rehoboth Beach, city taxes typically run about 1/4 of county taxes, though the relationship is not constant because one relies on a 1960s assessment, the other on a 1970s one!!
Dewey Beach collects something each year from property owners to restore the beaches, in case there is erosion that the federal government or state government won't pay to correct, but the beaches were renourished this past winter, at no expense to the property owners. According to an article from a week or two ago, the tax is $0.40 per $100 of assessed value. That article says, "A property in Dewey Beach with an assessed value of $200,000 would pay a total of $240 each year in taxes – $80 for beach replenishment and $160 for capital improvements." But it doesn't seem to realize that the only homes with assessed values of $200,000 are valued by their sellers at over $6 million! $80 is trivial to the owner of those $6 million oceanfront homes.
But to the typical worker in Dewey Beach, the $109 annual license to work within the borders is not so trivial.
Does it make sense to tax workers? Or is there a better tax base than productive activity? What taxes work best? Which taxes do the least damage?
Is working a privilege, or a right? I understand licensing doctors, nurses, lawyers and the like; I don't understand licensing singers, painters, waiters, and other workers.
The following list comprises the most commonly asked questions about the concept of making land and resource rentals the source of revenue for government. As you continue this study, you will see the value from giving resources the respect they deserve and the benefits resulting from the freeing of labour, production and exchange from taxation. If you have any questions which are not covered here, or observations you would like to put to our panel, please feel free to do so by sending your question as an e-mail query and we will attempt to respond.
The inclusion of land and resources in the economic equation is central to any solution for revenue raising. A taxation solution which does not consider the nature of taxation itself and allows the continuing private monopolisation of community land and resources fails to recognise the essential role land plays in the economic equation and will not work. Land is the only element in the economic equation which is both fixed and finite. It can be monopolised. It is a unique class of asset which must be treated accordingly. If we were to wrest not the land itself, but its unimproved value from private monopolies and return the value to the community — whose very presence creates it — then we would have reduced many problems in one stroke with great benefit to production, to the environment and to the cause of individual freedom and justice.
On the subject of land and resource rents, Henry George said this:
The tax upon land values is the most just and equal of all taxes. It falls upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by nature be attained.
The man of wealth and pride Takes up a space that many poor supplied — Space for his lake, his park's extended bounds, Space for his horses, equipage and hounds; The robe that wraps his limbs in silken cloth Has robbed the neighboring fields of half their growth; His seat where solitary sports are seen Indignant spurns the cottage from the green; Around the world each needful product flies, For all the luxuries the world supplies, While thus the land adorned for pleasure all In barren splendor feebly waits the fall.
The essential principle of property being to assure to all persons what they have produced by their labor and accumulated by their abstinence, this principle cannot apply to what is not the product of labor, the raw material of the earth.
— JOHN STUART MILL, Political Economy, Book II., Chap. 2, Sec. 5.
When the "sacredness of property" is talked of, it should always be remembered that any such sacredness does not belong in the same degree to landed property.
— JOHN STUART MILL, Political Economy, Book II., Chap. 2, Sec. 6.
This excerpt makes some important points about a number of topics this blog focuses on:
why wealth and income concentration are not good for the economy;
rent and rent-seeking behavior
the extent to which the financial sector is absorbing the profits made by the productive sectors of our economy
I look forward to reading the book. I'll be curious to see whether Professor Stiglitz gets into what we can do via reforming our tax system to reduce the amount of rent that is available for private and corporate rent-seekers. Treat rent as our COMMON asset... Natural Public Revenue!! Don't leave it there for corporations to privatize.
It is no accident that the periods in which the broadest cross sections of Americans have reported higher net incomes — when inequality has been reduced, partly as a result of progressive taxation — have been the periods in which the U.S. economy has grown the fastest. It is likewise no accident that the current recession, like the Great Depression, was preceded by large increases in inequality. When too much money is concentrated at the top of society, spending by the average American is necessarily reduced — or at least it will be in the absence of some artificial prop. Moving money from the bottom to the top lowers consumption because higher-income individuals consume, as a fraction of their income, less than lower-income individuals do.
In our imaginations, it doesn’t always seem as if this is the case, because spending by the wealthy is so conspicuous. Just look at the color photographs in the back pages of the weekend Wall Street Journal of houses for sale. But the phenomenon makes sense when you do the math. Consider someone like Mitt Romney, whose income in 2010 was $21.7 million. Even if Romney chose to live a much more indulgent lifestyle, he would spend only a fraction of that sum in a typical year to support himself and his wife in their several homes. But take the same amount of money and divide it among 500 people — say, in the form of jobs paying $43,400 apiece — and you’ll find that almost all of the money gets spent.
The relationship is straightforward and ironclad: as more money becomes concentrated at the top, aggregate demand goes into a decline. Unless something else happens by way of intervention, total demand in the economy will be less than what the economy is capable of supplying — and that means that there will be growing unemployment, which will dampen demand even further. In the 1990s that “something else” was the tech bubble. In the first decade of the 21st century, it was the housing bubble. Today, the only recourse, amid deep recession, is government spending — which is exactly what those at the top are now hoping to curb.
The “Rent Seeking” Problem
Here I need to resort to a bit of economic jargon. The word “rent” was originally used, and still is, to describe what someone received for the use of a piece of his land — it’s the return obtained by virtue of ownership, and not because of anything one actually does or produces. This stands in contrast to “wages,” for example, which connotes compensation for the labor that workers provide. The term “rent” was eventually extended to include monopoly profits — the income that one receives simply from the control of a monopoly. In time, the meaning was expanded still further to include the returns on other kinds of ownership claims. If the government gave a company the exclusive right to import a certain amount of a certain good, such as sugar, then the extra return was called a “quota rent.” The acquisition of rights to mine or drill produces a form of rent. So does preferential tax treatment for special interests. In a broad sense, “rent seeking” defines many of the ways by which our current political process helps the rich at the expense of everyone else, including
transfers and subsidies from the government,
laws that make the marketplace less competitive,
laws that allow C.E.O.’s to take a disproportionate share of corporate revenue (though Dodd-Frank has made matters better by requiring a non-binding shareholder vote on compensation at least once every three years), and
laws that permit corporations to make profits as they degrade the environment.
The magnitude of “rent seeking” in our economy, while hard to quantify, is clearly enormous. Individuals and corporations that excel at rent seeking are handsomely rewarded. The financial industry, which now largely functions as a market in speculation rather than a tool for promoting true economic productivity, is the rent-seeking sector par excellence. Rent seeking goes beyond speculation. The financial sector also gets rents out of its domination of the means of payment — the exorbitant credit- and debit-card fees and also the less well-known fees charged to merchants and passed on, eventually, to consumers. The money it siphons from poor and middle-class Americans through predatory lending practices can be thought of as rents. In recent years, the financial sector has accounted for some 40 percent of all corporate profits. This does not mean that its social contribution sneaks into the plus column, or comes even close. The crisis showed how it could wreak havoc on the economy. In a rent-seeking economy such as ours has become, private returns and social returns are badly out of whack.
In their simplest form, rents are nothing more than re-distributions from one part of society to the rent seekers. Much of the inequality in our economy has been the result of rent seeking, because, to a significant degree, rent seeking re-distributes money from those at the bottom to those at the top.
But there is a broader economic consequence: the fight to acquire rents is at best a zero-sum activity. Rent seeking makes nothing grow. Efforts are directed toward getting a larger share of the pie rather than increasing the size of the pie. But it’s worse than that: rent seeking distorts resource allocations and makes the economy weaker. It is a centripetal force: the rewards of rent seeking become so outsize that more and more energy is directed toward it, at the expense of everything else. Countries rich in natural resources are infamous for rent-seeking activities. It’s far easier to get rich in these places by getting access to resources at favorable terms than by producing goods or services that benefit people and increase productivity. That’s why these economies have done so badly, in spite of their seeming wealth. It’s easy to scoff and say: We’re not Nigeria, we’re not Congo. But the rent-seeking dynamic is the same.
LVTfan here: Think what would happen if we SOCIALIZED rents, and substituted them as our revenue source for all the taxes we pay ... sales taxes, wage taxes, building taxes, excise taxes ...
Recall what Leona Helmsley told us: "WE don't pay taxes. The little people pay taxes." Think what a weight would be lifted off our economy if those taxes were taken off the produces of labor, and put onto Rent, in all its forms!
S. 1144 would require the Department of the Interior (DOI) to charge a 2 percent royalty on the value of soda ash produced on federal lands through 2016. Under current law, CBO expects that the royalty rate would remain at 6 percent over that period. CBO estimates that implementing S. 1144 would reduce net federal offsetting receipts from soda ash royalties by $75 million over the 2013-2016 period; therefore, pay-as-you-go procedures apply. Enacting S. 1144 would not affect revenues.
CUI BONO? Seems to me that the states involved lose revenue and the Federal Government loses revenue! What a deal!!! A lose, lose, lose situation! Whose resources are we talking about anyway? (Hint: corporations are not we-the-people! Aren't WE nice to give THEM low royalties on OUR natural resources?)
Here's more from the CBO paper; I've omitted the tables because they don't reproduce well:
S. 1144 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).
ESTIMATED COST TO THE FEDERAL GOVERNMENT The estimated budgetary impact of S. 1144 is shown in the following table. The costs of this legislation fall within budget function 300 (natural resources and environment).
By Fiscal Year, in Millions of Dollars 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013-2017 2013-2022 CHANGES IN DIRECT SPENDING Estimated Budget Authority 30 15 15 15 0 0 0 0 0 0 75 75 Estimated Outlays 30 15 15 15 0 0 0 0 0 0 75 75
BASIS OF ESTIMATE For this estimate, CBO assumes that the legislation will be enacted near the end of 2012.
S. 1144 would reduce the royalty rate on the value of soda ash produced on federal lands from 6 percent to 2 percent over the 2013-2016 period. Based on information from the Bureau of Land Management, CBO expects that, under the bill, firms that paid 6 percent in royalties during 2012 would receive refunds in 2013 of any amounts in excess of the 2 percent rate established by the bill. In addition, because CBO expects that royalty rates charged for soda ash production on state and private lands would be higher than 2 percent, we also expect that, under the bill, the amount of soda ash produced on federal lands would be higher over the next four years than it would be under current law. However, CBO estimates that any increase in production would only partially offset the loss of receipts from lowering the royalty rate through 2016.
In 2011, the last time the royalty rate was set at 2 percent, firms produced 8.8 million tons of soda ash on federal lands and paid royalties totaling $22 million. Based on information from DOI regarding soda ash production and royalty collections through the first half of 2012 (when the royalty rate increased to 6 percent), CBO estimates that firms will produce 7.2 million tons of soda ash on federal lands in 2012 (a decline of roughly 20 percent from 2011) and will pay gross royalties totaling $44 million (double the amount collected in 2011). Thus, under current law, we estimate that, after payments to states of half the gross proceeds, net receipts to the federal government in 2012 will total $22 million. If S. 1144 is enacted, we expect that DOI would refund about $15 million of that amount to firms in 2013. CBO also estimates that implementing the bill would reduce receipts in each year over the 2013-2016 period by a similar amount. In total, CBO estimates that enacting S. 1144 would reduce net offsetting receipts from soda ash royalties by $75 million over the 2013-2016 period.
The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending or revenues. The net changes in outlays that are subject to those pay-as-you-go procedures are shown in the following table.
CBO Estimate of Pay-As-You-Go Effects for S. 1144 as introduced on June 6, 2011 By Fiscal Year, in Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012-2017 2012-2022 NET INCREASE OR DECREASE (-) IN THE DEFICIT Statutory Pay-As-You-Go Impact 0 30 15 15 15 0 0 0 0 0 0 75 75 3 INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT S. 1144 contains no intergovernmental or private-sector mandates as defined in UMRA. The royalty reduction required by the bill would temporarily reduce federal payments toCalifornia, Colorado, New Mexico, and Wyoming by a total of $75 million over the 2013-2016 period.
PREVIOUS CBO COST ESTIMATE On June 5, 2012, CBO transmitted a cost estimate for H.R. 1192, the Soda Ash Royalty Extension, Job Creation, and Export Enhancement Act of 2012, as ordered reported by the House Committee on National Resources on May 16, 2012. S. 1144 is similar to H.R. 1192, and the CBO cost estimates are the same for those bills.
ESTIMATE PREPARED BY: Federal Costs: Jeff LaFave Impact on State, Local, and Tribal Governments: Melissa Merrell Impact on the Private Sector: Amy Petz
ESTIMATE APPROVED BY: Theresa Gullo, Deputy Assistant Director for Budget Analysis
To treat land, with the present privileges attached to the possession of it, as an article of sale, to be passed from hand to hand in the market like other commodities, is an arrangement not likely to be permanent either in Ireland or elsewhere.
— J. A. FROUDE, Ireland, Nineteenth Century, September, 1880, p. 369.
The masthead for "The New Earth" -- by 1899 already in volume XI -- says "Devoted to the study and illustration of Social Problems on Moral and Religious Grounds."
Below that, each issue says,
The opening of all natural opportunities to Labor and Capital, so that both may be fully and constantly employed and receive their full earnings.
TO EFFECT THIS,
We would take through taxation the rental value of land, completely exempting improvements, and would use this revenue for public purposes in lieu of the taxes that now oppress labor and Capital and restrict their productive employment.
In our address "To our readers " last month we advanced the proposition, which indeed is an almost self-evident truth, that the better side of human nature, the side of him which lifts man above mere animalism and materialism, which enables him to transcend mere self-seeking and to find his highest delight in ministering to the welfare of others, requires for its orderly growth and development, social and material conditions which shall parallel, correspond to or embody this better side of us. We maintained that it was as irrational on the part of sincere religious-minded people to expect the graces of the spirit to flourish in social conditions which bear no relation to these graces save that of inveterate antagonism to them as it would be on the part of a farmer to expect a crop of wheat from seed sown on the sand of a rainless desert. Social conditions are, of course, no more the cause of the higher life of man, than fertile ground is the cause of the crop. They are simply the soil in which the higher life can germinate and be nursed to maturity. The cause in the one case is within man himself, as in the other it is within the seed; in both cases it is the creative energy.
But man, both as an individual and as a race, is at first unconscious of this better nature of his, as well as of the kind of life of which it is capable, and through which it must eventually express itself. He becomes conscious of this part of himself by degrees, one step at a time. This process is called evolution. But all evolution necessitates a corresponding previous involution. No plant can grow, or be evolved, from a seed unless the germ of the plant first exist within the seed. So in the case of mankind, no advance in social development is possible unless the germ of better social conditions be within man himself.
Of this germ within it mankind becomes conscious slowly and as the years and ages roll by. It first takes the form of aspirations, and longings and hopes for gentler, humaner and juster relations between men, and of clearer and ever clearer perceptions in respect to the character of the Creator and His relations to His creatures. But these aspirations and perceptions must ever remain as dreams more than any thing else, and even then be confined to a few, until they become sensibly imaged or embodied in corresponding social conditions.
That society as at present organized bears true relation neither to our best aspirations nor to the conceptions of the character of the Creator entertained by every intelligent mind needs no showing. That our Creator and source of life should be a respecter of persons, that He should consider some of His creatures as more fitting objects of His regard than others, that He should provide for the eternal progress of some and leave that of others unprovided for, is a conception of Him utterly discarded by every man today whose mental growth has gone beyond that of the dark ages. But such gross conception of the Creator is just that of which organized society at this day is an embodiment. The kind of ownership of the natural opportunities with which we invest some among us is a representative picture of a conception of the Creator that makes Him a capricious, unjust monarch, granting privileges to a few favorites, and venting His spleen on all others. This is the only kind of conception of His character possible to the great mass of human beings as long as such conditions exist. Preach as we may, institute revivals of religion as we may, no other conception of the Creator can germinate, bear fruit and be a reality among us than this pagan and savage one.
To every honest holder of the more enlightened conceptions of the character of the Creator, then, the questions at once present themselves: What are the principles which society must recognize in order that social and material conditions may fittingly reflect these conceptions; and what can I do to bring about these conditions? True belief, especially on a subject of this kind, must lead to action. The self-satisfaction of entertaining more enlightened convictions than others, and being content with that, is the most hideous form of unbelief.
The answer to these questions is not hard to discover. Organized society, in order that it make any approach to the conditions required of it as a soil in which may flourish true ideas of spiritual life must recognize the equal right of all its members in the bounties of nature and the opportunities offered by the general advance of civilization. It must find means jealously to protect these rights amid all the changing and more and more complex conditions which every progressing body of people must experience.
We, now, unhesitatingly assert that only by building upon the Single Tax ideal can these rights be maintained. In no other way can any real equality of opportunity be assured to every one. When the rental value of land, and nothing but that, is taken through taxation and spent for public needs, opportunities for making a living become open to all more equally than would be possible under any artificially devised scheme of government control. The Single Tax would do the work automatically, and without the the friction and consequent waste of power involved in any direct control and allotment of opportunities by the government.
The Single Tax would, moreover, provide another requirement of orderly social conditions. It would make every man work out his own material salvation, and so embody to us the truth that every man must work out his own spiritual salvation. Under the Single Tax there would be no royal road to the acquisition of material wealth, even as there is no royal road to the acquisition of mental wealth or of spiritual riches.
But the colony multiplies, while the space still continues the same, the common rights, the equal inheritance of mankind, are engrossed by the bold and crafty; each field and forest is circumscribed by the landmarks of a jealous master. . . . In the progress from primitive equity to final injustice the steps are silent, the shades are almost imperceptible, and the absolute monopoly is guarded by positive laws and artificial reason.
— EDWARD GIBBON, Decline and Fall of the Roman Empire,
Wherever the ownership of the soil is so engrossed by a small part of the community that the far larger number are compelled to pay whatever the few may see fit to exact for the privilege of occupying and cultivating the earth, there is something very like slavery.
— HORACE GREELEY, Slavery at Home, in Hints Toward Reforms (1845), pp. 354-5.
Place one hundred men on an island from which there is no escape, and whether you make one of these men the absolute owner of the other ninety-nine, or the absolute owner of the soil of the island, will make no difference either to him or to them.
— HENRY GEORGE, Progress and Poverty, Book VII., Chap. 2, p. 312.
Here is the fundamental error, the crude and monstrous assumption, that the land which God has given to our nation, is or can be the private property of anyone. It is a usurpation exactly similar to that of slavery.
— PROF. F. W. NEWMAN, Lectures on Political Economy (1851), Lecture VI., p. 533.
It is well known that these materials and agencies, as fast as they become available, are in the main appropriated by individuals, through the agency or consent of the government, and are then held as private property. Such is the case with the soil and the minerals beneath it. The owners of this property charge as much for the use of it as if it were their own creation, and not that of nature.
— PROF. SIMON NEWCOMB, The Labor Question, North American Review, July, 1870, p. 151.
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 land is common to all. All have the same right to it; but there is good land and bad land, and everyone would like to take the good land. How is one to get it justly divided? In this way: he who will use the good land must pay those who have got no land of the value of the land he uses," Nekhludoff went on, answering his own question. . . . "Well, he had a head, this George," said the oven builder, moving his brows. "He who has good land must pay more."
— COUNT TOLSTOY, Resurrection, Book II., Chap. 9.
Tolstoy has rightly discerned the evils which follow the uprooting of the people from fostering Mother Earth, and the incubation of a day-wage-earning, urban, industrial proletariat.
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).
Land, which nature has destined to man's sustenance, is the only source from which everything comes, and to which everything flows back, and the existence of which constantly remains in spite of all changes. From this unmistakable truth it results that land alone can furnish the wants of the state, and that in natural fairness no distinctions can be made in this.
— EMPEROR JOSEPH II., in Oestreichische Geschichte fur das Volk, Vol. XIV. (Vienna, 1867).
another excerpt from Dawson (1910 -- see an earlier post, below) -
IT is necessary now to consider more fully than hitherto the question, cannot society with right claim the increased value given to land by distinctly social causes? We have seen the various factors which tend to create what is generally known as "unearned increment." In one sense this term is very inaccurate. The increment is by no means unearned; what is meant, when the phrase is used, is that the landowner has not earned it. Society, however, has; and earned it honestly by heavy toil, by exertion of body and brain, by plodding industry, by bold enterprise, by culture and enlightenment, by progress in numbers, in wealth, and in morality. There is not a yard of land in the country — be it used for the growing of corn, the pasturing of cattle, or the habitations of men — whose value has not been enhanced by these social causes. It was the settlement of men with their various activities upon the land which originally gave it value, and the increase of population has been a constant and potent factor in value-growth since the primitive communities first established the institution of private property in the common soil. And yet, while society has for centuries been growing and labouring to increase the value of the land it required for its food, its industries, and its habitations, it has ever done so to its own detriment. While enriching the landlords it has impoverished itself.
This, indeed, is the greatest anomaly presented by the social increment problem. As a community develops and prospers, owing to its energy, enterprise, and enlightenment, it is all the time preparing a rod, armed with which the landlords will sooner or later turn upon it. A town's residents are punished for their industry and merited success by having to pay the landlords more and more money for the land they use. Did not tradesmen, by dint of perseverance and pluck, succeed and thrive, the demands made upon them would not increase; but simply because they reap in prosperity the reward of exertion, the landlords require growing tribute in the form of higher rents. And so it is in all departments of social life. In the eyes of the owners of the soil, human communities become, in fact, simply value-creators, rent-producers. The landlords reap where they have not sown, they gather where they have not strawed. Little of the value of that land which they lend and sell, at prices which are often so fabulous, has been created by them, yet they appropriate it all.
This is a short excerpt from an anonymous 1897 article/book entitled "The Revolutionary Tendencies of the Age."
Whatever else may be said of this earth, she is generous in her resources, and responsive to the needs of those who live thereon. She has immeasurable wealth which she yields liberally to man's labor. For untold past centuries she has sent forth fruit for the nourishment of her children, and seems disposed to do so for untold centuries to come. She is certainly an earth of plenty; nay, we have known periods when man, pressing his suit for her favors, received more than he could well dispose of. Nor has the race been negligent in utilizing the materials which nature seemed to hold in reserve for their benefit. In every quarter of the globe is found evidence of the stupendous work accomplished by man — not only to sustain life; not only to secure the useful, but the beautiful. In this task his genius has contrived to lend assistance to his hand; it has helped increase a thousandfold the power of production, and as a result we see an increase of a thousand-fold in the wealth of the world.
But notwithstanding the bounteousness of nature and the never-slacking labor of man; notwithstanding the almost fairy-like assistance which newly-discovered forces and appliances lend to human efforts; notwithstanding the facility with which new riches are produced, and their almost incredible growth during the past century, the majority of the people are still poor, and many of these are in actual want. And this is due, to a very considerable extent, to the gross inequality in the division of wealth. The latter is absorbed by the few, hence it cannot be applied as a means to improve the condition of the many. Whatever increase there is in productive power; whatever increase there is in riches; whatever advantage is drawn from the sciences, the arts — from progress in any form — the minority derive the main benefit thereof.
Labor-saving machinery, which implies that humanity, as a whole, will have to labor less, should, one might think, be welcome to all humanity. As a matter of fact, it is really welcome to very few; and these few, odd as it may appear, are not workers; therefore the laborsaving machine does not reduce their work. But it is welcome to them because it increases their revenue; because they can secure from one machine results it once required many hands to secure.
Multitudes of men look upon many modern inventions as their worst enemies, for they deprive them of the opportunity to labor, and by labor alone can they live. Thus, that which should cause the whole of mankind to rejoice, causes large numbers to despond; that which should be hailed by them as a blessing, is considered as a curse!
So long as laws fail to prohibit the unreasonable and unjust inequality in the division of the goods of this earth, they constitute a cause which must have the inevitable effect of attracting riches toward the rich, and repelling them from the poor. This, under existing economic conditions, is as certain to occur as, under existing physical conditions, certain bodies are attracted to others, while others are repelled. Material progress might advance by leaps and by bounds, and wealth accumulate to a fabulous degree; the sands of our shores might be turned to grains of gold; the mountains might be transformed into solid masses of iridium; but while the laws stand as they now stand, progress and wealth will continue to follow the fixed channel traced for them, and increase the beauty, luxuriance, and delights of the oasis of the favored band, while leaving the arid plains, whereon the multitudes dwell, as desolate and unattractive as formerly. For this is the natural result of prevailing laws, and, these laws enforced, their effect cannot be avoided.
Thus, while men are associated in a social body, and are ruled by laws theoretically for the benefit of all, the fact is that the majority of men, thus associated, are the recipients of the fewest benefits. Society, instead of being based, as is often claimed, on the principle that its working should redound to the advantage of the greatest possible number, and that the interests of a portion thereof should not be paramount to the interests of the whole, is based, practically, on the principle that its working should redound to the advantage of the smallest number, and that the interests of the whole are insignificant as compared with those of a portion thereof. The entire spirit of society — its customs, laws, government — is tainted with this purpose. The proof of this lies in the fact that the majority of the members of the social body are kept in a state of constant activity, so as to sustain the minority in a state of constant leisure; they are kept in a state bordering on misery and want, so as to sustain the few in a state of luxury and abundance.
As our time honored political maxims become hackneyed they are very apt to pass into what Grover Cleveland would call innocuous desuetude. We subscribe to the sentiment that "eternal vigilance is the price of liberty" and yet little is done to counteract those aggressive forces which nullify that freedom which we profess to prize so highly. Even the prayer, "Thy Kingdom Come," is repeated as a mere wish that something good would happen rather than with a determination to bring about those righteous conditions which make for a heaven on earth. Possibly the most neglected of all of our national ideals is our professed adherence to that most democratic of all maxims, "Equal rights for all and special privileges for none." For at the present time our country is honeycombed with special privilege that has become so entirely entrenched as to be regarded on all sides as vested right. Special privilege is condoned by force of its familiarity. Like vice it is endured, then pitied, then embraced.
There lived in a Colorado city years ago a housewife who made convenient use of coal cars on the side track across the street from her dwelling with which to replenish her stock of fuel. This she did without any qualm of conscience but as a special privilege which, by the sanctifying touch of time had grown into a vested right. This woman doubtless was punctilious in the ordinary obligations of life and would have hotly resented any statement to the effect that she was stealing coal. She was guided by that all too common kind of honesty which is based upon expediency rather than principle. Not on any account would she have withheld what was due from her to a neighbor who would have suffered by her delinquency, but the advantage to her of getting this coal was so great and the loss to some impersonal owner of same, mine, railroad, or smelter, was relatively so negligible that the argument was all in favor of her acting in her own interest without question. No personal equation was involved and if at first there had been any hesitation on her part of this practice, that was long ago a thing of the past. But the railroad company put a watchman on guard and her supply of fuel was thereby stopped. She then turned to the local charity organization with request for a continuation of the supply which had thus been rudely taken from her and the very righteous indignation with which she told her story was ample proof of entire absence of comprehension on her part that she had been stealing.
This incident, which is a true story, illustrates very nicely the evolution and the nature of that special privilege which eventually becomes a vested right. And if the searchlight of analysis is turned upon our social system we may be surprised to find the presence of special privilege in unexpected places and of a volume that is, in the aggregate, enormous.
As a basis for this inquiry it may be well to state the fundamental truth that property may be secured in three ways only; first, by labor; second, by gift; and third, by theft. If this test is repeatedly kept in mind, the task will become easier. One of the commonest forms of special privilege is that which is provided under ninety-nine year leases on valuable business property sites. These leases convey to the owner of the land a stipulated income after the tenant has paid all taxes and expenses. In the parlance of political economy this revenue consists of what John Stuart Mill defined as unearned increment, a value which is produced by no individual but which is purely the result of population reflected upon desirable locations. For this revenue to be turned over to individuals as is now the unquestioned custom in all of our large cities and to an amount of billions of dollars annually is a procedure which is precisely in the same class as the stealing of coal from the railroad car by the Colorado housewife.
A much larger source of public revenue which is diverted to individuals is that of the rent of valuable property in excess of a fair interest return upon the intrinsic value of improvements on the property. This applies to practically all property located at the center of our large cities and involves enormous revenues. There is a mixture here of legitimate return on capital invested with the unearned increment which belongs absolutely to society but the case is not less clear on that account.
Another prolific source of public revenue which is diverted to individuals is that which comes from the lucky possession of oil wells. This possession frequently gives incomes of thousands of dollars daily to those who have no more claim on such revenue than is involved in the possession of the land upon which the wells were developed. The wealth that has by this means been given to certain sections of the country and certain groups of people has run into the billions of dollars. The Osage tribe of Indians in Oklahoma are said to have been made the richest people in the world due to this special privilege. Such beneficiaries are no more justly entitled to the revenue which they receive than was the Colorado woman justified in stealing coal from the railroad car. It will be said that the oil industry involves a great deal of capital and that many dry wells are paid for before a single producing well is developed. This is true and therefore makes the proposition somewhat more complicated but does not alter the conclusion.
Another source of revenue which diverts public funds into private hands is speculation in land. Purchase of inside property sure to increase in value is the one investment that has been invariably recommended by shrewd financiers. This speculation is far greater than has been generally realized. More than one-half the area of New York City consists in vacant lots which are held out of use for speculative purposes, and the same is true of all our larger cities. Incidentally, this speculation has the effect of enhancing the selling price of desirable land to artificially high figures. When land which is purchased with a hope of subsequent rise in value, the investor practically lays a trap by which he may secure values that rightfully belong to the community. And this process makes an artificial scarcity of land with consequent artificially high cost to those who must use it. This process of securing a profit, of getting something for nothing, is persistently the same in character as that by which the Colorado housewife secured her supply of coal. Here again objection may be interposed to the effect that land frequently has to be sold for less than it cost. This is an objection that was raised by no less an economist than Francis A. Walker, the foremost critic of Henry George during his lifetime. General Walker exclaimed, "Mr. George has much to say about unearned increment: He says nothing, however, about unrequited decrement." Mr. George's rejoinder to this was an expression on his part of his inability to discuss the problem with one who spoke of unrequited decrement in something which originally had no value. In other words, so far as society is concerned its interest is only in the rental value which is produced from year to year and which rises or fall accordingly as population grows or wanes. The important fact is that this increment, whether large or small, belongs to the community which produced it.
The most spectacular form of special privilege which we have to deal with today is that provided by the protective tariff. This protection enables the America manufacturer to secure an artificially high price for his product. The common argument in support of the protective system is that the American standard of living must be maintained by this artificial means, but this argument falls to the ground, if at the same time, we permit any improvement in labor-saving machinery which naturally has far greater effect upon the labor market than is produced by the competition of merchandise imported from abroad. The enormity of special privilege due to the tariff is perhaps more conspicuous in the State of Pennsylvania than elsewhere, a single family in Pittsburgh, the direct beneficiaries of the tariff on aluminum, being reputed to be worth in excess of $2 billion. There will be found that, with a few rare exceptions, the great fortunes of America are based upon special privilege of one kind or another.
Although there are many minor sources of special privilege which are embedded in our political and social institutions, those above enumerated are the principal ones.
The special privileges provided by legislative action at Washington are in a different class from those which have become a regular part of our system of taxation but are none the less to be condemned. The most flagrant of these in recent times was the appropriation by Congress and approved by President Hoover, of $500,000,000 of tax payers' money for the specific purpose of stabilizing or artificially enhancing the price of wheat, cotton, and other farm products. It was presumed by the makers of this law that it would have the effect of giving artificial advantage to the farming class, which would offset in a measure the special privileges which had been given so generously to Eastern interests by means of the protective tariff. The plea for this farm legislation was repeatedly based upon that consideration. It so happened that even the immense waste of money involved by the farm marketing act was negligible as an influence in the world wide markets and that it did not affect in any considerable degree the law of supply and demand upon the prices of the agricultural products which were supposed to be favored. But the very fact that this legislation was put through with little opposition furnished a very good illustration of the fact that special privilege legislation is regarded as perfectly legitimate. And this has been further illustrated in monstrous degree by the New Deal legislation under President Roosevelt.
There is everywhere consciousness of a mysterious force which is responsible for easily acquired fortunes on one hand together with an increase of unemployment and consequent lower incomes on the other hand. Each succeeding census report makes more appalling this undemocratic and unjust condition in our social fabric.
If prosperity is to be secure, there must be an end to special privilege of every kind, and a system of taxation inaugurated in place thereof which shall be based upon justice to all. Henry George has demonstrated how this should be done.