Land Value Taxation will solve many of the 21st century's most serious social, economic and environmental problems, and promote justice, fairness and sustainability. We CAN have a world in which all can prosper.
Progress and Poverty, by Henry George Here are links to online editions of George's landmark book, Progress & Poverty, including audio and a number of abridgments -- the shortest is 30 words! I commend this book to your attention, if you are concerned about economic justice, poverty, sprawl, energy use, pollution, wages, housing affordability. Its observations will change how you approach all these problems. A mind-opening experience!
Henry George: Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth ... The Remedy This is perhaps the most important book ever written on the subjects of poverty, political economy, how we might live together in a society dedicated to the ideals Americans claim to believe are self-evident. It will provide you new lenses through which to view many of our most serious problems and how we might go about solving them: poverty, sprawl, long commutes, despoilation of the environment, housing affordability, wealth concentration, income concentration, concentration of power, low wages, etc. Read it online, or in hardcopy.
Bob Drake's abridgement of Henry George's original: Progress and Poverty: Why There Are Recessions and Poverty Amid Plenty -- And What To Do About It! This is a very readable thought-by-thought updating of Henry George's longer book, written in the language of a newsweekly. A fine way to get to know Henry George's ideas. Available online at progressandpoverty.org and http://www.henrygeorge.org/pcontents.htm
Where Else Might You Look?
Wealth and Want The URL comes from the subtitle to Progress & Poverty -- and the goal is widely shared prosperity in the 21st century. How do we get there from here? A roadmap and a reference source.
Reforming the Property Tax for the Common Good I'm a tax reform activist who seeks to promote fairness and reduce poverty. Let's start with the enabling legislation and state requirements for the property tax. There are opportunities for great good!
The only point where I do not find myself in complete accord (and
that is perhaps more due to your comparative silence than anything
else) is that I attach relatively more importance to the initial
injustice done by the permitted monopoly of raw material in a few
hands. It seems to me that individualism, in order to be just, must
strive hard for an equalisation of original conditions by the
removal of all artificial advantages. The great reservoir of natural
wealth that we sum up as land (including mines, etc.) ought, it
seems to me, to be nationalised before we can say that the
individual is allowed fair play. While he is thwarted in obtaining
his fair share of the raw material, he is being put at a
disadvantage by artificial laws.
—Grant Allen, Letter to Herbert Spencer, 1886, in "Grant Allen, A
Memoir," by Edward Clodd.
In our society, established upon a very rigorous idea of
property, the position of the poor man is horrible; he has literally
no place under the sun. There are no flowers, no shade, no grass but
for him who possesses the earth. In the East these are the gifts of
God, which belong to no man. The proprietor has but a slender
privilege; nature is the patrimony of all.
"Of course the fact that a chief or land-owner has bought and paid
for a particular privilege or species of taboo, or has inherited
from his fathers, doesn't give him in any moral claim to it. The
question is, Is the claim in itself right and reasonable? for a
wrong is only all the more a wrong for having been long and
— GRANT ALLEN, The British
Barbarians. (Words spoken by Bertram.)
A sig-file on a listserv brought to my attention a quote from St. Ambrose, which, to my surprise, Ernest Crosbydidn't include in his Earth-for-All Calendar:
"You are not making a gift of what is yours to the poor man, but you are giving him back what is his. You have been appropriating things that are meant to be for the common use of everyone. The earth belongs to everyone, not to the rich."
In the very first pages of Scripture we read these words: "Fill the
earth and subdue it."(19) This teaches us that the whole of creation is
for man, that he has been charged to give it meaning by his intelligent
activity, to complete and perfect it by his own efforts and to his own
Now if the earth truly was created to provide man with
the necessities of life and the tools for his own progress, it follows
that every man has the right to glean what he needs from the earth. The
recent Council reiterated this truth: "God intended the earth and
everything in it for the use of all human beings and peoples. Thus,
under the leadership of justice and in the company of charity, created
goods should flow fairly to all." (20)
All other rights, whatever
they may be, including the rights of property and free trade, are to be
subordinated to this principle. They should in no way hinder it; in
fact, they should actively facilitate its implementation. Redirecting
these rights back to their original purpose must be regarded as an
important and urgent social duty.
The Use of Private Property
"He who has the goods of this world and sees his brother in need and
closes his heart to him, how does the love of God abide in him?" (21)
Everyone knows that the Fathers of the Church laid down the duty of the
rich toward the poor in no uncertain terms. As St. Ambrose put it: "You
are not making a gift of what is yours to the poor man, but you are
giving him back what is his. You have been appropriating things that are
meant to be for the common use of everyone. The earth belongs to
everyone, not to the rich." (22) These words indicate that the right to
private property is not absolute and unconditional.
No one may
appropriate surplus goods solely for his own private use when others
lack the bare necessities of life. In short, "as the Fathers of the
Church and other eminent theologians tell us, the right of private
property may never be exercised to the detriment of the common good."
When "private gain and basic community needs conflict with one another,"
it is for the public authorities "to seek a solution to these
questions, with the active involvement of individual citizens and social
The Common Good
certain landed estates impede the general prosperity because they are
extensive, unused or poorly used, or because they bring hardship to
peoples or are detrimental to the interests of the country, the common
good sometimes demands their expropriation.
Vatican II affirms
this emphatically. (24) At the same time it clearly teaches that income
thus derived is not for man's capricious use, and that the exclusive
pursuit of personal gain is prohibited. Consequently, it is not
permissible for citizens who have garnered sizeable income from the
resources and activities of their own nation to deposit a large portion
of their income in foreign countries for the sake of their own private
gain alone, taking no account of their country's interests; in doing
this, they clearly wrong their country. (25)
Those interested in Catholic Social Thought should look for a new book which came out of a 2007 conference held at the University of Scranton, and edited by Professor Kenneth R. Lord of UScranton, entitled "Two Views of Social Justice: A Catholic/Georgist Dialogue." The version I've seen is the October, 2012, issue of The American Journal of Economics and Sociology, and I understand that it will be made available in other forms as well.
The abstract for the book:
Sixteen scholars have come together in this issue to examine eight social-justice themses from the perspectives of Catholic Social Thought and the philosophy of Henry George. The themes they address are natural law, human nature, the nature of work, the nineteenth-century papal encyclical Rerum Novarum, causes of war, immigration, development, and wealth, and neighborhood revitalization. While they sometimes wrangle with each other, their common aspiration is the same as their nineteenth-century predecessors,: to find solutions to the human suffering caused by injustice.
I suppose the result must be . . . the establishment of society
under a wholly new idea. . . The leading features of any such
radical change must be a deep modification of the institution of
property — certainly in regard to land, and probably in regard to
— HARRIET MARTINEAU (1853),
Autobiography, Vol. II., Sec. 10, p. 119.
As you read this, recall that a single acre of urban land can be worth $250,000,000 or more -- over 23,000 times what the recently-doubled farmland described in this article sold for!! Also, it seems worthwhile to point out that 160 acres (one quarter of a square mile), at $10,700 each, works out to $1.7 million -- currently well below the threshold for the federal estate tax!
Consider, too, what it is that the land speculator brings to the process of production, and what he is rightly entitled to in a fair and just society, and what society is entitled to, and what the workers -- the farmer and his employees -- are entitled to, and what the capitalist -- the fellow who pays for the buildings and equipment -- is entitled to. Seems like the land speculator is making out awfully -- awefully! -- well but isn't producing or creating anything!! Why do we do things this way? Did the absentee landlord deserve a share of the crop the farmer created? If the farmer has to pay rent to someone, shouldn't it be the community? Wouldn't it be better if America's investors were motivated to put their funds into better equipment (capital) or employing people (labor)?
November 8, 2012
Howard Audsley has been driving through Missouri for the past 30 years to assess the value of farmland. Barreling down the flat roads of Saline County on a recent day, he stopped his truck at a 160-acre tract of newly tilled black land. The land sold in February for $10,700 per acre, double what it would have gone for five years ago.
Heading out into the field, Audsley picked up a clod of the dirt that makes this pocket of land some of the priciest in the state.
"This is a very loamy, very productive, but loamy soil," Audsley said. "A high-clay soil will just be like a rock and that's the difference between the ... soils. And the farmers know this and the investors know this. That's why they pay for it what they do."
A Steep Surge In Prices
not just the value of Missouri cropland that's rising. Corn Belt
farmland prices from Iowa to Illinois and Nebraska to Kansas have been
sky-high lately, boosted by $8-a-bushel corn.
paid about $3.3 million for [about 650 acres] in Southeast Illinois in
2009," said Diggle, who is the CEO of Singapore-based Vulpes Investment
Management. The company handles $250 million of investor money, about 15
percent of which is in farmland.The
high commodity prices have helped encourage investors like Steve
Diggle, who have no connection to farming, to compete for their very own
acreage in the Heartland.
year we sold it at auction and we got $5.1 million," he said, referring
to the Illinois farmland. "That's 55 percent higher than we paid. Plus
we got two yields — one of 3.5 percent and one of 5 percent. So, you
know, as an investment, that's 63 percent over three years. [It] is
great and we're extremely happy with it."
says his firm also purchased a 1,400-acre tract in Illinois two years
ago. The company plans to hold on to it to make money through cash rents
and land appreciation.
value of your land may go up or down. But as long as bond prices remain
where they are, it's very hard to see how we'll have a sustained bear
market for agriculture," Diggle said. By comparison, he said, the
extremely low returns in the bond market are "just so inferior."
A Safer Investment
You don't have to be a billionaire to invest in farmland.
professor Andy Trupin, who lives in Delray Beach, Fla., bought a
155-acre tract of farmland in Lebo, Kan., two years ago because it
looked like it would make him more money than gold or the stock market.
He also owns another tract that's primarily pastureland.
seemed like a much safer vehicle to get an income stream even though
... it's not a high-income stream. At least it's more than you would get
on Treasuries at any duration," Trupin said. "And at the same time,
[farmland offers] price appreciation or to at least [holds] its value in
the event of an inflation period."
investment has paid off so far, Trupin said. He rented out the land to a
local farmer who grows corn, soybeans and wheat. Even the brutal
drought failed to knock down the investment.
we managed to get 20 bushels to the acre of corn even though the place
was as dry as Las Vegas last year," Trupin said. "I'm willing to let the
income from this thing fluctuate. In bad years, it's a slight loss —
maybe a couple of thousand on the year — and in good years, you gain up
to $10,000 on it."
found the land online and got help purchasing it by Realty Executives
of Kansas City. The company says 90 percent of its new customers are
investors like Trupin, and it holds seminars for investors that walk
them through the process of evaluating and buying farmland and how to
find local farmers to rent the land.
probably a higher percentage now of people who are strictly investors,
stock market people, money-market-type investors, and ... they're buying
all types of land," said Dale Hermreck, a broker for Realty Executives
who says he sold $21 million worth of farmland in Kansas last year.
have a lot of outside interest from Texas, Chicago, New York," Hermreck
said. "I get calls and inquiries all over the United States."
The Specter Of A Bubble
to University of Missouri agriculture economist Ron Plain all of this
sounds a bit like the housing bubble burst of 2006. He is concerned a
similar bubble could be happening in farmland.
get several years going up faster than that long-term trend of 6
percent [annual increases] and you're then in a situation where you're
sort of due for a correction," Plain said. "And the way you correct is
pull those land values down — or 'pop the bubble' ... and so there's
concern about that and it's kind of reasonable to worry."
said that with mortgage rates at their lowest in 60 years, it's
reasonable to expect the cost of borrowing to go up eventually. And if
crop prices retreat from record highs, he said, that means "less income
per acre and therefore less ability to pay for farmland."
a bubble burst, farmland might be harder to sell, especially compared
with other more liquid investments. But investors argue that any bubble
is still far off, and they believe that farm acreage will remain a solid
long-term investment so long as the demand for food continues to grow.
remains to be seen whether investors will be able to compete with
farmers for the small supply of high-quality cropland available in the
Midwest, says broker Hermreck.
have people call me all the time and I just don't have what they're
looking for," Hermreck said. "Simply supply and demand. It's just not
there. I could sell an awful lot more of this land if it was available.
And people seem to hang on to something that's making some money and
real popular. It's just real popular now to own land."
Fentress Swanson reports from Missouri for Harvest Public Media, an
agriculture-reporting project involving six NPR member stations in the
Midwest. For more stories about farm and food, check out harvestpublicmedia.org
We now speak of property in land; and there is a difficulty in
explaining the origin of this property consistently with the law of
nature; for the land was once, no doubt, common; and the question
is, how any particular part of it could justly be taken out of the
common and so appropriated to the first owner as to give him a
better right to it than others; and what is more, a right to exclude
others from it. Moralists have given many different accounts of this
matter, which diversity alone, perhaps, is a proof that none of them
— ARCHDEACON PALEY, Moral and
Political Philosophy (1785), Book III., Part I., Chap 4.
See also January 28 and 29, and Kate Kennedy's "Paley's Pigeons."
In the early ages of society it would have been impossible to
maintain the exclusive ownership of a few persons in what seems at
first sight an equal gift to all (the land) — a thing to which
everyone has the same claim.
— WALTER BAGEHOT (1826-1877),
Economic Studies, Essay I., Part I., p. 31.
The right of inheritance, or descent to the children and relations of the deceased, seems to have been allowed much earlier than the right of devising by testament. We are apt to conceive at first view that it has nature on its side; yet we often mistake for nature what we find established by long and inveterate custom.
— SIR WILLIAM BLACKSTONE, Commentaries, Book II., Chap. I, p. II.
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 is not proposed to confiscate any value that has been created by human industry. This would be robbery. But when the community creates wealth it is entitled to it as much as the individual is to the wealth he creates.
I thought this 110 year old article worth sharing. (See also, over at wealthandwant.com, the page on "ownership and possession.") Seems appropriate as we enter the celebration of the Declaration of Independence.
The Railroad trainman, Volume 19 - By Brotherhood of Railroad Trainmen December, 1902, page 918
Property Rights Florence A. Burleigh
THE recent coal strike has brought the subject of property rights to the minds of many people who had never before thought of it seriously. In a general way, most people think that no one should appropriate to himself what does not belong to him, and that every one has a right to keep what does belong to him. The only question is, what constitutes rightful ownership? Possession certainly does not, neither does any one rightfully own anything simply because he bought it and paid for it in "hard-earned money."
It is a little amusing to hear people argue that such and such a person — often a "poor widow" — owns a piece of land, a horse or a building because it was paid for in "hard-earned money." Is it his or hers any more because the money was hard to earn than if it was easily earned or came down from heaven like manna? Paying for a thing, whether with "hard-earned" money or money that is easily earned, gives no valid title; there must be a little back of that which is transferred or there is no rightful ownership. A man might buy a horse and pay to the seller its full value in gold; but if the horse had been stolen, no matter how many times it had been sold since, it belonged to the man from whom it was stolen. A man can give no better title to anything than he possesses, and title is not made by buying or selling.
Hard and unjust as were the demands of the mine owners in the recent coal strike, they are perfectly legitimate, if it is once conceded that those men or corporations own the mines. A man may do what he likes with his own if he does not aggress on other people's rights. If these men really owned the mines they had a perfect right to sit back and say to the miners, "You shall not work for us unless you come to our terms; there is nothing to arbitrate." They have a right to close their mines for as long a time as they choose, to offer only starvation wages, to compel their employes to trade at "pluck-in" stores, or to exact any other terms they may choose to impose if the mines are really theirs.
Ownership includes absolute control by the owner of the thing owned. If a man owns a tool, a piece of furniture or a watch, he is at liberty to break or burn it, or give it away if he does not care to use it. He may refuse to lend it to any but men with black hair or may put it in a glass case in his parlor if he chooses; it is nobody's business but his own what he does with it, so long as he injures no one else. It may be that he would be foolish, selfish in his disposal of it, but that is his own affair; the article is his without question — his to do with as he pleases.
So it is with mines or any other land; if a man really owns them and can show a good title, he has a right to "dictate terms'' to any one else who wants to use them or whom he wants to work for him; no one can justly interfere. But is the title to coal mines or other natural resources as good as that to labor products? Can it be traced back to the Creator? If so, private property in land is right; if not, private property in land is wrong.
Ownership comes from production -- production being used in the large sense to include exchange. If a man makes a hat it is his; if he exchanges the hat for a coat or a pair of shoes, they are also his because that for which he exchanged them was his. But how is it with land? Can anyone show a title from the producer? Henry George says in "Progress and Poverty," Book VII, Chapter 1: "What constitutes the rightful basis of property? . . . Is it not, primarily, the right of a man to himself, to the use of his own powers, to the enjoyment of the fruits of his own exertions? . . . As a man belongs to himself, so his labor when put in concrete form, belongs to him. And for this reason that which a man makes or produces is bis own as against all the world — to enjoy or to destroy, to use, to exchange, or to give. No one else can rightfully claim it, and his exclusive right to it involves no wrong to anyone else. Thus, there is to everything produced by human exertion a clear and indisputable title to exclusive possession and enjoyment which is perfectly consistent with justice as it descends from the original producer in whom it is invested by natural law. . . . . There can be to the ownership of anything no rightful title which is not derived from the title of the producer and does not rest upon the natural right of the man to himself. There can be no other rightful title because, (first) there is no other natural right from which any other title can be derived, and (second) because the recog nition of any other title is inconsistent with and destructive of this.
" . . . If production give to the producer the right to exclusive possession and enjoyment, there can rightfully be no exclusive possession and enjoyment of anything not the production of labor and the recognition of private property in land is wrong. For the right to the produce of labor cannot be enjoyed without the right to the free use of the opportunities offered by nature, and to admit the right of private property in these is to deny the right of property in the produce of labor."
Herbert Spencer, in the unrevised edition of "Social Statics," Chapter 9, said: "Either men have the right to make the soil private property or they have not. . . . . If they have such a right, then is that right absolutely sacred, not on any pretense to be violated. . . . If they have such a right, then it would be proper for the sole proprietor of any kingdom — a Jersey or a Guernsey, for example — to impose just what regulations he might choose on its inhabitants — to tell them that they should not live on his property unless they professed a certain religion, spoke a particular language, paid him a specified reverence, adopted an authorized dress and conformed to all other conditions he might see fit to make. . . . There is no escape from these inferences. They are necessary corollaries to the theory that the earth can become individual property. And they can only be repudiated by denying that theory."
These quotations are given not because Mr. George or Mr. Spencer or anyone else is infallible, but because the conclusions are irrefutable if once the premises are granted and it is inconceivable that anyone who is at the same time thoughtful, intelligent and fair can deny the premises.
It may be that the statute law allows private property in land, but statute law never of itself made right. Statute law has always winked at or allowed much wrong and injustice, but notwithstanding that, piracy and chattel slavery were finally abolished. When the majority of people come to see the enormous and fundamental wrong in private ownership of land, they will change the laws and wonder how they could have been so blind before as to think that private ownership, in what was not and never could be made by man, was right.
When once the right of all men to the use of the earth is recognized and land is free for all to use as long as they pay to the community the value of that use, then labor will be really free and employers will find that they cannot get a man to work for them unless they treat him justly and fairly.
Imagine a man saying to his physician, "I will not employ you unless you will trade at my store, profess my religion and vote the ticket I tell you to!" The idea is preposterous; yet it is not essentially different from what we see about us everywhere. The sick man employs his physician in essentially the same way that he employs his coachman or his tailor, but the physician is a free agent and the coachman is not, yet both do him a service.
It is seldom that people see that anyone who works for them does them a service, yet that is the case. A rather amusing incident which illustrates this point happened not so long ago at an out of the way town where there are no very poor and no very rich people. A lady who was spending the summer in this place needed extra help and went to ask for it from a woman who had occasionally helped in an emergency, but who at this time did not, for reasons of her own, care to go out to cook even for a day. The burden of the would-be employer's sad song was not so much that she was inconvenienced by the woman's refusal, but that she (the lady) had so kindly and generously offered work and it was scorned. The truth probably was that the woman did not want the small amount of money she would have received as much as she wanted to stay at home and, fortunately, she was free to make her own choice which is not often the case. The reverse of this is so generally the rule that it is a pleasure to occasionally find workers who can afford to be independent. Sometime, when enough people see the injustice of our present social conditions, when we have real freedom and equality, men will not need to almost sell their souls in order to keep their bodies alive for employers will not ask anyone to do it, as they would know it would be useless. Competition will be free and both sides can make a fair bargain, not only between employers and employes, but between all business men.
Among the proper subjects for ownership the one which stands pre-eminent among the others is the man himself. A man's ownership of himself is one of the most sacred things in the world, for it includes his right to freedom of thought, speech and action and the just claim to the product of his labor. It means that every man will have a chance to make the most of himself without interference from anybody.
Let us, then, do what we can to bring about this condition that the world may be the better for our having lived in it, and the next generation may enjoy their right to "life, liberty and the pursuit of happiness.''
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 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 item, from a Canadian library, seems to me to be a good short statement of the reform many of us seek; I particularly like the next-to-last paragraph.
1899 ADDRESS TO THE CHURCHES FROM THE FOLLOWING ORGANIZATIONS:
The Single Tax Association, The Trades and Labor Council, The Allied Printing Trades Council, The International Builders' Laborers' Union, The International Association of Machinists, The Toronto Typographical Union, The Toronto Street Railway Employees' Union and Benefit Society.
THE circumstances of the last few years have revealed a most serious condition in the social arrangements of this Continent. With an immeasurable endowment of natural wealth, with the improvement of machinery beyond all parallel, with the means of transportation perfected as never before, with the power of producing wealth in abundance vastly greater than in any other age, we still see the terrible sight of ghastly poverty, of oppressive want, of enforced idleness, and all this in the shadow of palaces with all the outward and visible signs of inordinate luxury.
Is it not true that the larger the city the more evident is the widening of the gulf between the haunts of poverty and the palaces of the millionaires? Is it not manifestly evident that somehow and somewhere in our social arrangements there is an unfortunate want of equity, a terrible miscarriage of justice? When some must toil like slaves and then secure only a fractional part of what they produce, and when others without doing the slightest productive act, can enjoy an abundance of superfluous luxuries, when with the most ample natural opportunities for employment, thousands find it so difficult to secure employment, how can the industrial classes be convinced that equity reigns and justice triumphs?
We trust you will pardon us for submitting to you the following enquiries: —
For whom did the Creator furnish this vast storehouse of natural wealth? What are we to understand by the terms "God the Father, maker of heaven and earth" and the terms "Dearly beloved brethren"? Are we to understand that he is the universal father and that every child of every generation can come to him with the same filial reverence and say, "My Father, am not I thy child, an heir of thy bounties?" Do you ask us to accept this doctrine of Fatherhood and Brotherhood, this doctrine of equal heirship for all, or are we to understand that herein is a serious mistake, that we are not all equally the heirs to his gifts, but that the bounties of the Creator were a special gift to one portion of humanity, to them and their heirs, "to have and to hold forever?" Are we to regard it as in accordance with equity, that one part of humanity may claim for themselves the power to exclude us from these bounties, and to demand from us an endless tribute for occupying the surface of the planet, so that no matter how abundant may be our productions, we must for ever surrender that abundance for the opportunity of getting access to the common heritage furnished by the Creator?
When the farmer produces food and the clothier produces clothing, and they exchange, we can at once recognize the equity and justice of the transaction. In this transaction we see the fulfilment of the Golden Rule, to do unto others as we would have others do unto us. This is service for service, burden for burden, sacrifice for sacrifice, enrichment for enrichment, and its equity is at once most clearly apparent. There is no difficulty in seeing the justice of the transaction that leaves both parties benefited by a mutual enrichment and we can at once recognize the brotherhood in the injunction: "Bear ye one another's burdens and thus fulfil the law of Christ."
Nor is there any difficulty in understanding that when men have raised crops, built houses, fabricated goods, when they have changed scarcity into abundance, then they have established an unquestionable right to claim abundance.
We ask you now to look at a marked contrast to these examples. The growth of population on this continent is proceeding with very great rapidity, especially in the cities, many of which double their population every ten years. With this increase of population there must necessarily come relative scarcity of land. While, therefore, industry is ever striving to produce abundance of commodities, increased population is necessarily making land more scarce. Now we would like to know by what principle of justice should we, who beget the abundance, have to surrender that abundance and thus have left for ourselves only scarcity, while speculators and other holders of land, claim the abundance that we have produced because land has become scarce?
Is there not something monstrously unjust, awfully inequitable in this arrangement? With every increase in population, with every public improvement, the land holder can claim from us more and more. As the years go by his claim may increase ten fold, twenty fold, fifty fold, a hundred fold or a thousand fold. Is this because he has increased the productiveness of his energies, and the abundance of his industry? Is it because of his industry that the harvest waves, that dwellings increase, that railroads develop? Not at all, but the very reverse. Does he give abundance for abundance, benefit for benefit? Not at all, but the very reverse. It is out of the abundance of our products that he is licensed by law to appropriate that abundance and to leave us but a meagre relict of penury. The transaction is not enrichment for enrichment, but while we enrich, the land holder impoverishes.
Could there be anything more contrary to the spirit of true religion than this method by which, as fast as one party does the enriching, another party appropriates the riches, leaving the producers in poverty?
The producers of abundance despoiled and left with scarcity; others allowed to appropriate the abundance because land becomes scarce; and by our present arrangements this may continue to the end of time, the obligation of the industrious classes ever increasing, thus insuring their endless impoverishment, the power of the land owner to appropriate the products of industry ever increasing, thus insuring the widening of the gulf between leisured affluence and overworked poverty. Can we be convinced that this is the fruits of righteousness and of that "love which rejoices not in iniquity"?
We have no difficulty in understanding why we should pay the farmer who feeds us, the tailor who clothes us, the teacher who instructs us, and any one who produces for us, or renders us a service; but we cannot possibly understand why we should have to pay any man for access to the land, the forest, the minerals or the other things that man never furnished, any more than we should have to pay him for the sunlight, the air or any other gift of the Creator, and it is equally difficult to understand why we should have to pay an increasing amount of our productions to land holders because the increase of population makes land more scarce. Is not the whole system of land speculation an attempt to secure the products of industry by the impoverishment of the producers; how can it succeed except by the spoliation and degradation of industry? Is it not a wrong that should receive the most emphatic condemnation of the whole church?
You urge us, you plead with us, you beseech us to come and unite with you and to yield ourselves to the claims of religion. But what kind of religion do you ask us to adopt? A religion that rejoices in equity, that loves justice and hates iniquity; or a religion that looks on the spoliation of labor, if not with complacency at any rate too often in silent tolerance or even acquiescence? A religion that recognizes every child of God as equally the heir of God, the heir to the bounties of the All-Father-Creator, or a religion that ignores the fact that the earth with all its potentialities is the gift of God to his children? A religion that seeks to secare all the benefits and rewards of an advancing civilization to those who bear the burden of begetting and supporting that civilization, or a religion that secures the benefits of civilization to the full and overflowing to those, who not merely contribute nothing whatever to its maintenance, but who by their mischievous dog-in-the-manger speculations, often stand in the way of its progress? A religion that demands obedience before sacrifice, or a religion that substitutes charity for justice and cast-off clothing for the principles of righteousness!
Is it not vain to expect men to join with enthusiastic devotion in the propagation of a professed religion that unfortunately ignores the highest claims of religion, that repeats, "Our Father who art in heaven," but ignores the fatherhood on earth, that initiates its service with "Dearly beloved brethren," and then splits society into lordlings and serfs, that enjoins honesty and then fosters and rewards despoiling speculations, that with the lips extols peace and unity, love and justice, but, alas! alas! maintains in operation lorces that beget hostility and discord, strikes and lockouts, riots and labor wars?
The universal and unvarying testimony of the ages endorses the truth, "As ye sow, so shall ye also reap." To sow the seeds of injustice and to expect the fruits of righteousness, to plant the apples of discord and then to look for the fruits of peace, is to look for limpid purity in the stream, while maintaining putrescent corruption in the fountain, it is to look for grapes from thorns and figs from thistles.
With all respect we submit to you these thoughts as transcendantly the most important to which we could call your attention.
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,
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.
We are fully aware that there exists in the minds of many persons a vague apprehension, that if the present laws relating to landed property were to be disturbed, evils of the most malignant character would invade the society of Britain. Nothing could be more absurd, more puerile, more dastardly. The very same fears have prevailed with regard to every other change that has taken place.
— PATRICK EDWARD DOVE, Theory of Human Progression (1850),
At present in this vicinity the best part of the land is not private property; the landscape is not owned. But possibly the day will come when fences shall be multiplied and man-traps and other engines invented to confine men to the public road, and walking over the surface of God's earth shall be construed to mean trespassing on some gentleman's rounds.
— HENRY DAVID THOREAU, Essay on Walking, in Excursions, p. 264.
While I was in the wood alone by myself a gathering of nuts, the forester popped through the bushes upon me, and asking me what I did there, I answered, "Gathering nuts."
"Gathering nuts!" said he; "and dare you say so?"
"Yes," said I. "Why not? Would you question a monkey or a squirrel about such a business?"
. . "I tell you," said he, "this wood is not common; it belongs to the Duke of Portland."
"Oh! My service to the Duke of Portland," said I; "Nature knows no more of him than of me. Therefore, as in Nature's storehouse the rule is, First come, first served, so the Duke of Portland must look sharp if he wants any nuts."
— THOMAS SPENCE, Pig's Meat (1793)
in Land for the Landless (Wm. Reeves, 1896), pp. 7-8.
"I find this vast net-work, which you call property, extending over the whole planet. I cannot occupy the bleakest crag of the White Hills or the Allegheny Range, but some man or corporation steps up to me to show me that it is his."
— EMERSON, The Conservative.
Extended excerpts from The Conservative (an 1841 speech) follow ...
Are they not mine, saith the Lord, the everlasting hills? . . . Are they not mine, where I dwell — and for my children? How long, you, will you trail your slime over them, and your talk of rights and of property?
Man is a land animal as much as a fish is a water animal. Not only does man live on land but all of his wants are supplied by or from land. The earth is, literally, his mother. He will perish quickly if he has not access to the breast of his earth mother and will suffer and squall and become panicky if he has not free access to earth's breast and cannot obtain sufficient nutriment. His relation to land is fundamental and can be broken or disturbed only at great peril and loss to him and to society.
Production and consumption will always be in equilibrium and commerce and exchange will always flow smoothly, if all men at all times have equal and free access to nature's storehouse of wealth and if there are no dams -- tariff, -- etc. to interfere with the exchange of products. Free land and free trade are therefore, essential to economic justice; to give all an equal opportunity to produce goods and to exchange them without paying toll to anyone. When goods are produced and exchanged freely, it is reasonably certain that production and consumption will run so closely together that there can be no serious panics or long periods of depression. Serious maladjustment can and will occur only when production and exchange are interfered with and to the extent that they are interfered with.
The private ownership of land, that is, the taking of economic or land rent by private land owners, or landlords, most seriously interferes with some men's access to mother earth. Landlords are not only dogs in the manger; they are a class and about the only class, except the tariff beneficiaries, that consume without producing; that do not give a quid pro quo for what they get.
The capitalist supplies capital and is entitled to the interest that he gets. The laborer --wage, salary or fee earner -- produces goods or gives services and is entitled to what he gets in exchange. The landlord produces neither the land nor the land rent and is not, therefore, entitled to the rent that he takes. He is the only one who takes out of the economic pot without putting something into it. He is the only one who can and does live off the labor of others. He is the greatest of all economic leeches.
Professor Thorold Rogers said, in 1870:
"Every permanent improvement of the soil, every railroad and road, every bettering of the general condition of society, every facility given for production, every stimulus supplied to consumption, raises rent. The landowner sleeps, but thrives. He alone, among all the recipients in the distribution of products, owes everything to the labor of others, contributes nothing of his own. He inherits part of the fruits of present industry, and has appropriated the lion's share of accumulated intelligence."
If, as in ordinary times, the landlord takes only a moderate rent, that is, charges only the actual rental value of land to the capitalist and laborer who use land, production and consumption proceed normally, for society has fairly well adjusted itself to this unjust system. In times of great prosperity -- so-called -- when there is great speculation in land values and they rise rapidly, the landlords can and do take even more than the normal rental value of land; that is, more rent than is produced by society. Access to land then becomes so difficult and the prices that producers have to charge for food, clothing and shelter become so high that consumers are unable, after paying excessive rent, to purchase all of the goods produced. Hence, the glut in the market; the decline in the prices of commodities; the collapse of the over-extended credits; business failures; closed mills; idle labor and low wages. The business depression does not end until land values have declined to or below normal for the population. Soon thereafter business begins to revive, mills to open, unemployment to decrease, wages to advance and prosperity to return. Industry will continue on the up-grade until rents again become excessive. Most, if not all, periods of prosperity end with real estate booms. Even our present war prosperity will probably continue until there is a boom in city, farm, forest and mine land values.
The taxation of all property at a uniform rate is made necessary by the constitutions of about three-fourths of the States of the Union. The taxes on chattels, tools, implements, money, credits, etc., find their condemnation from the Single Taxer's point of view in those ethical considerations which differentiate private from public property. Where there arises a fund known as "land values," growing with the growth of the community and the need of public improvements, it is not only impolitic, it is a violation of the rights of property to tax individual earnings for public expenses.
The value of land is the day-to-day product of the presence and communal activity of the people. It is not a creation of the title-holder and should not be placed in the category of property. If population deserts a town or portions of a town, the value of land will fall; the land may become unsalable. When treated as private property the owner of land receives from day-to-day in ground rent a gift from the community; and justice requires that he should pay taxes to the community proportionate to that gift.
"Land value" or "ground rent" as the older economists termed it, is a tribute which economic law levies upon every occupant of land, however fleeting his stay, as the market price of all the advantages, natural and social, appertaining to that land, including necessarily his just share of the cost of government.
I had the pleasure of watching part of a marathon of the second season of Downton Abbey yesterday, knowing that I'd missed a few shows -- and want to watch them all in sequence.
The setting of the show raises some questions one might want to think about.
1. What sort of wages do all the "downstairs" employees receive?
2. What employment alternatives are available to them?
3. How does the owner of Downton Abbey afford to pay for the services of all those workers, in addition to the non-wage costs of maintaining the castle and the surrounding land, which is an overwhelming job -- and passion -- for him?
4. Is there a middle class in that town? On what are their fortunes dependent? How are they different from the staff at Downton Abbey?
5. What are the opportunities for the children of the house staff at Downton Abbey to have a different life from their parents?
6. Can others prosper?
7. What sorts of ideas, particularly on public policy, maintain the status quo?
8. Why is having the property pass intact to one person so important? What would happen if it were divided among several heirs?
9. Do you think there are small holdings in the same area, where individual families can live, work and prosper, or a series of large holdings like DA?
10. Are people unemployed or underemployed? Are their opportunities limited by the system, particularly if they care about staying close to family?
This is off the top of my head. I'm charmed by the series, and at the same time, am puzzled by how much I enjoy watching it. (Good writing, of course.)
Supposing the entire habitable globe to be so enclosed, it follows that if the landowners have a valid right to its surface, all who are not land owners have no right at all to its surface. Hence such can exist on the earth by sufferance only. They are all trespassers. Save by the permission of the lords of the soil, they can have no room for the soles of their feet. Nay, should the others think fit to deny them a resting place, these landless men might equitably be expelled from the earth altogether
—HERBERT SPENCER, Social Statics (1850), Chap. IX.
[Note. — It should be remarked that after circulating this chapter for forty years, the author withdrew it. The truth however, cannot be withdrawn, and we quote this chapter on its own merits here and elsewhere. Its logic is unanswerable.]
4. Oil and natural gas are pumped from the Gulf of Mexico and along our ocean coasts by corporations large and small. (Mason Gaffney points out that Harry Truman increased the size of the US by more than any other president by expanding the coastal zone, but that we collect little revenue from the natural resources drawn therefrom.) How much should the oil companies pay the federal government?
B. Just the amount negotiated in 1996. We can't change the rules just because the price of these commodities has risen rapidly.
C. A fixed and trivial percentage of the value of the oil.
D. A rising percentage of the value of the oil and gas, related to the retail prices of the products.
E. An amount that is based both on a percentage of the value of the oil and gas and on the amount of carbon produced by burning the finished product.
The historical fact that land values have been privately appropriated and that this practice has been sanctioned for many generations does not alter its inherent inequity: an ethical wrong is not converted into a right by the benediction of time or of social sufferance.
If the present generation becomes conscious of an old injustice, is it powerless to seek redress? "New time" it has been said, "oft makes ancient good uncouth."
This was in a booklet published in the early 1960s.
The Ethics of Land-Value Taxation
Louis Wasserman, Ph. D., Professor of Philosophy and Government, San Francisco State College
The question, briefly stated, is this: Should the owners of land whose rent and increments would be partially or wholly confiscated by a program of land-value taxation be compensated for their losses?
We are not bound here by what Henry George thought about the matter; nevertheless, there is probably no better position from which to launch our consideration. The answer given by the father of the Single Tax was clear and explicit: No, the landowners should not receive compensation.
Why not? Since George made so much of social justice -- asserting it as the basis of his whole scheme -- upon what grounds could he justify the confiscation of landed wealth? The answer is implicit in the very essence of his social analysis. Let us turn to his argument.
What, George asks, is the moral basis of property -- any kind of property? And he replies that this basis is to be found in the use of a man's powers to produce something of value; once he has done so, the product is henceforth his to use, to dispose of, to exchange into any tangible or intangible form. The right to property, then, is the right to the fruit of one's labor.
But this, he continues, is precisely not the situation with regard to landed property. The raw land is not produced by any man's labor: it was there before the advent of man, it is the bounty of nature to all men in common, and it is literally the foundation upon which they exert their labors. And just as the raw land is created by nature, so the value it acquires as real property is due to society as a whole -- to the growth of the community with its services, its needs, and its uses. As community-created value, then, the rental and increment derived from the natural land ought to be appropriated by the community at large and used for public purposes.
Just as a man, then, has the full right to the products of his own labor -- say a house he has built or has purchased with his earnings -- so no individual has the right to the land itself, which he has had no hand in creating and whose value is due to the aggregate of community efforts rather than to that of any single person within it. The historical fact that land values have been privately appropriated and that this practice has been sanctioned for many generations does not alter its inherent inequity: an ethical wrong is not converted into a right by the benediction of time or of social sufferance.
This, in brief, is the rationale of Henry George's appeal for the socialization of land values. It is couched in terms of natural rights, and its fundamental premise is the labor theory of property, viz., that the only true source of private property, its ethical justification, rests in the labor by which it was produced, whatever direct or indirect form it takes.
That there are practical weaknesses in this view is, of course, apparent. The labor theory of property has been shelved, since the nineteenth century, in favor of more complex and sophisticated analyses of wealth production, and it can no longer be accepted as a self-evident proposition. Moreover, the theory of natural rights upon which it rests -- although stubbornly recurrent in Western thought -- enjoys at present only a limited vogue among moderns; there is too much disagreement on specifics and, no matter what its form, such a concept is regarded as too rigid for social purposes.
Nevertheless, if we are to seek for an ethical justification for private property it is unlikely that we can find anything better than the labor theory. It is no argument against the ethical rightness of that theory that it has been historically superseded by another, or that it is insufficient to account for the complexity of the productive process, or that the division of labor has made unintelligible the product of any individual worker. No matter how greatly production has become socialized or in what manner its rewards have come to be partitioned, the irreducible element remains that of individual labor, the contribution of the hand or brain of each producer to the material and equipment at hand. It is not enough for a theory of property simply to describe its character and distribution; there must be an explanation to account for the phenomenon and some social ethical criterion to justify it. I am aware of no ethical theory, ancient or modern, religious or secular, which would deny explicit or implicit approval to the labor theory of property.
But perhaps it will be argued against any such ethical contention that private property is simply what a society has caused it to be, and that since a society is the sole source of its own ethics, the matter ends there. What then, it may be asked, is used to justify the institution: force, fraud, custom, tradition? Each of these may have its weighty explanation, but what can be said of its ethical sanction? At worst, that it has been imposed, willy-nilly; and, at best, that it represents a social arrangement sanctified by age, legality, and expectation. But the history of property, as idea, usage, and institution, is so heterogeneous among so many cultures of the past and present that the term itself can be taken to mean only that which current convention decrees it to mean. Perhaps, then, property may be best conceived, to use the phrase of Walton Hamilton, as "a conditional equity in the valuables of the community."
If -- setting aside the natural rights theory -- the ethical test of land-ownership and increment is taken to be a matter of social convention or utility, the whole issue is, of course, thrown open for social evaluation by each generation.
The present condition is that most of the usable raw land in the United States is held privately; it has been obtained by purchase, gift, or inheritance; it enriches its owners by way of direct use, rental income, or profitable sale; the community siphons off part of this income in the form of an annual property tax or, when the land is sold at a profit, by a capital gains tax.
Now, the most extreme land-value tax proposal provides that this levy upon the rental value of the raw land be increased gradually until it approximates the full rental income; at the same time, tax levies on personal property, improvements, and as many other taxes as possible would be abolished.
What ethical considerations are involved in this proposal? If we are to reject any "higher law" criteria, such as that of Henry George, we must revert to the test of "social utility" or some restatement thereof. How are the ethics of social utility to be tested in our society? The answer is quite simple: Social approval of any established practice is expressed by sheer inertia or by the rejection of proposed change; the reform of any established practice is engineered by the majority through democratic procedures. To put it starkly, the ethical judgment with respect to any social change is transformed into a political decision.
We are all, of course, familiar with the democratic political process, but it is worth recapitulation to see how a social consensus may be reached on such an issue as land-value taxation. We start with the theoretical foundations of popular sovereignty and government by consent of the governed. The working machinery includes representative bodies, public-interest groups, freedom of expression, and the media of communication employed to shape public opinion. Since every tax proposal is a matter of public policy, it must necessarily be discussed and legislated by the appropriate public body -- i.e., the state legislature, county board of supervisors, city council, or the like. Sober attention must be paid in all such cases to the variety of interests, needs, motives, preferences, and other relevant factors in the affected community in order to shape a policy which attains its purpose and yet does not alienate too seriously any important segment of the population. The final result, as registered in the legislative chamber or at the polls, is what we come to accept as public policy.
It would be too harsh a judgment to infer from the foregoing description of the democratic process that the sheer weight of numbers over-rides all consideration of private preferences. What happens instead is that personal convictions, individual ethics, and material interests are mingled and measured and tested against each other in the give-and-take of public controversy; the result is a kind of rough-hewn, but acceptable, consensus which alone can make a community viable. It is this broad consensus -- the specified or implicit assumption that the policy to be enacted is a contribution to the common welfare -- which defines the realm of social ethics in public policy making.
Nor is this political approach to be regarded cynically or derided as unworthy of decent folk. The social ethic of American society is tightly bound to the prescriptions of our prevailing Judeo-Christian and democratic-humanistic traditions, and we may draw from that source as much in the form of ideal moral principles as we are humanly able to practice. If we cannot agree upon common aims, we are at least the inheritors of a tradition of fair play as to means; and if the nature of justice is a matter of great dispute among us, we are still guided by what Edmond Cahn describes as the "sense of injustice" -- that is, a consciousness of wrongdoing and the commitment to abstain therefrom.
The social ethic of a democratic society is continually being created and revised through public dialogue, political action, and law. It is necessary only to mention such illustrations as our attitudes regarding crime and punishment, treatment of our Negro population, the status of labor unions, sex information and birth control, the training of children, the prerogatives of women, and indeed the ameliorative role of taxation, to have us realize its progressively changing character. Through the use of the democratic process the social ethic emerges as a sort of mean between the extremes of private ideals and private irresponsibility. And it is worthy of mention that not infrequently the law itself nudges us into forms of behavior more ethical than we would exercise if left to our own dispositions.
Now, taxation policy inherently affects the general welfare of a community; and the social ethics of our society have for a long time recognized a distinction (despite certain weaknesses in definition) between earned and unearned incomes. Taxing policies in the form of differential rates and other incentives have been used here and in many other countries deliberately to foster, or to discourage, certain social-economic developments. A strong case can be made, in general, for taxation as a social instrument.
There was a time when the income tax did not exist at all in this country; then it was voted in, first as law, later as a constitutional amendment. At its present steeply progressive rates, the income tax may "confiscate" up to 91 percent of excessively high earnings. But, whatever the rate applicable, it is levied predominantly upon wages, salaries, and other forms of productive enterprise. Would an increased tax upon the socially created value of the natural land be less equitable or less lacking in ethical propriety?
I am, accordingly, unable to find any ethical barrier -- either of higher law principles or of social utility -- raised against the proposal to recapture more fully the rental income and increased increment of the land. There is, indeed, a strong rationale in its favor, especially since it would lead to the reduction of more burdensome taxes. The problem is one of social engineering; it is a decision to be reached solely upon its merits in the political realm.
That there is now, and will be, strenuous opposition to such a program is of course only too clearly evident. Without assuming the mantle of righteousness in prejudging the conduct of others, I would nevertheless venture to say that the main difficulties in enacting land-value taxation will stem principally from the following groups. First, and most importantly, opposition will come from those who derive their incomes wholly or primarily from landholdings and from speculative profits thereon. No argument concerning indirect, long-range benefits to them and others would suffice to soften their antagonism unless they stood to gain equally from a lightening of other taxes. Then there is the large group whose simple inertia would inhibit any such contentious reform in taxation policy. It is difficult to enlighten and energize this inert portion of any community unless the immediate benefits are made clearly, directly, and concretely self-evident to them. For this group there is no sharp sensitivity to the ethics of land-value taxation, pro or con. Finally, there are those in every community who have no vested interest in the change one way or the other but whose notions of propriety, of ethics, of the right to profit-making, or of general antipathy to government and reform would lead them to reject such a proposal on what are essentially ideological grounds.
If the result at the ballot box is to approve a measure to increase the tax rate on land values, it could not be denied that the social ethics had thus been expressed in a democratic manner. Similarly, if the tax increase is defeated (as has been true most often in the past), it would properly imply that the social ethics of the community did not then sanction such a proposal.
But we have so far left untouched the critical issue with which we began this discussion: that is, whether compensation should be paid to landowners whose rental incomes or increments are seriously impaired or expropriated as a consequence of the increased tax. Even if it be granted that land values ought, ab initio, to have been recaptured in full by the community for public revenue, the fact remains that they were not. And upon this practice of private ownership and appropriation there has been reared an institutional complex long approved and sanctioned by law. The present owners of land, it may be assumed, received or purchased their land in good faith and contractual expectations, often with capital acquired through alternative income channels. Are they, then, to be penalized for an ancient wrong -- if wrong it was -- which has been sanctified by the common usage of earlier generations?
But the counterquestion to this is even more cogent: If the present generation becomes conscious of an old injustice, is it powerless to seek redress? "New time" it has been said, "oft makes ancient good uncouth."
The answer, in practical terms, is to be found in the equity which can be extended to those who suffer most from social-political innovations. This is a matter to be determined by a commission of inquiry into the effects of the legislation; it should be in the minds of the legislators who draft the reform proposal; the nature of the equity to be granted will depend upon the provisions of the tax measure; and it will be affected by the give-and-take of the political process in which opposing groups make themselves heard.
Every public policy confers differential advantages and disadvantages upon those who are touched by its provisions. A decent respect for equity in the present matter, then, requires that the proponents of land-value taxation exercise their utmost ingenuity and technical skill -- not to provide direct compensation as such, but rather to devise fiscal and administrative measures to cushion the shock and to ameliorate the condition of those who stand to lose most severely by the action contemplated.
I do not make this suggestion in a spirit of vague and wishful penance for what is not certain, in practice, to be realized. Rather, I would recall to us all the wide range of creative and imaginative variations already proposed or practiced in fiscal policies and their administration, through which provision might be made without penalty to the community, for economic equivalents, direct or indirect, to landowners adversely affected by proposed land-value taxation.
The adoption of such provisions, I believe, would not only satisfy our social conscience but would do much to make land-value taxation politically possible.
Early in the 20th century, Ernest Crosby assembled a "birthday book" of quotations, containing readings for every day of the year, on the right of man to the earth, selected from upwards of 180 of the leading authors of the world, including the Bible, Plato, Aristotle, Plutarch, Virgil, Horace, Seneca, Josephus, Dante, Spinoza, Voltaire, Rousseau, Montesquieu, Hugo, Zola, Schiller, Goethe, Humboldt, Kane, Shakespeare, Milton, Scott, Byron, Shelley, Southey, Tennyson, Swinburne, Blackstone, Adam Smith, Ricardo, Mill, Carlyle, Froude, Herbert Spencer, Ruskin, Gladstone, Bright, Dickens, George Eliot, Emerson, Lowell, Jefferson, Franklin and Mark Twain.
Here's his preface:
Most people believe that our present system of private property in land is not only necessary and final, but even to a certain degree sacred and inviolable. And yet it is clear that every man born into the world has a just claim to an equal share of its raw material, and that the paying of rent, by one man to another, for the privilege of remaining on the globe, savors of comic opera. It is for the purpose of showing that the leading men of all nations and ages have questioned the right of monopoly in land, and have had a more or less clear conception of the injustice of it, that I have brought together the quotations contained in this calendar. It has surprised me, as I have no doubt it will surprise the reader, to find how long and persistently an ideal of justice in the distribution of the earth among its inhabitants has haunted the minds of the greatest thinkers. Surely, in the face of such an array of names, we shall not lay ourselves open to the charge of rashness if we decide to rise above our prejudices and examine for ourselves the question of the natural relation of every human being to the planet to which he is confined. For those who are already convinced of the necessity of reform in this matter the calendar may serve as an arsenal of arguments and authorities, and it is for them that I have provided an index of subjects.
I'll post each day's quotes, and you can read the entire collection (to date) by clicking on "Earth for All" at left. Some are fairly pedestrian, some quite extraordinary.
And after the calendar was published, there were an additional month's worth of quotes, published in The Single Tax Review, which I'll post eventually.
Consider that this was published at just about the same time that Lizzie Magie's board game "The Landlord's Game" was beginning to be played (around 1902). It was designed to teach the same ideas, and to show that there was nothing new or peculiar about them.
Thomas Jefferson, founder of the Democratic party in America, was born in Virginia, April 2d, 1743. In 1769 he entered politics, and at once took rank in the progressive party destined soon to dominate American aflairs. At the first convention in Virginia, held independently of the British authorities, he was marked as a bold, radical, and a fearless tribune of the people.
Jefferson was one of the foremost leaders of the agitation against British taxation without representation, writing in 1774 an aggressive article entitled, "A Summary View of the Rights of America." This was so widely read, and so fired with the revolutionary spirit against England, that, as Jefferson said, "he had the honor of having his name inserted in a long list of prescriptions, enrolled in a bill of attainder, commenced in one of the two Houses of the English Parliament, but suppressed in embryo by the hasty course of events." This pamphlet was the forerunner of Jefferson's greatest achievement, the Declaration of Independence, which he wrote while a member of the American Congress.
Jeffersonians of today have read with amused interest of an incident illustrating the stupid conservatism which existed a century ago as well as now. A lady of Tory proclivities who lived in Philadelphia on Fifth street, opposite the State House, wrote in her diary under date of July 8, 1776: "A Declaration of Independence was read today in the State House yard, very few respectable people were present."
In 1779 Jefferson became Governor of his State, and shortly afterwards was appointed embassador to France. In 1790 he became Secretary of State for the United States. In 1796 he was a candidate for the Presidency, but was defeated, acting then as Vice President. In 1801 he was elected to the Presidency by a large majority. He died July 4, 1826.
One of his biographers speaks of him as "frank, earnest, cordial and sympathetic in his manner, full of confidence in men, and sanguine in his views of life, eschewing all pomp and ceremony."
The keynote of his principles was liberty. He asked that the inscription on his tombstone should be: "Here lies buried Thomas Jefferson, author of the Declaration of American Independence; of the Statute of Virginia for Religious Freedom; and Father of the University of Virginia."
In other words, he devoted his life to civil liberty, religious liberty, and education. Several times he attempted to pass laws emancipating the slaves. But such was the state of feeling against that measure at that time that it is but one of the many illustrations of Jefferson's grand courage in defense of what he thought right. As he said, "he never feared to follow truth and reason to whatever results they led, bearding every authority which stood in their way."
Jefferson's popularity with and influence over the people lay in the fact that he believed in them, trusted and respected them. Speaking of Gen. Washington he says: "The point on which he and I differed was that I had more confidence than he had in the natural integrity and discretion of the people."
Jefferson had no confidence in laws that were not based on the greatest freedom of the individual, in harmony with the true self-government of all. He was so fearful of tyranny of government, so zealous in maintaining the liberties of the people, that he was continually combating any increase of governmental functions, though there were moments due to the peculiar conditions of the times, when he had to ignore this idea.
"The basis of our government," said Jefferson, "being the opinion of the people, the very first object should be to keep that right."
Writing to James Madison on the moral limitations of a nation's right to contract debt, and realizing that all the wealth to pay that, all national debts, must come from the earth, Jefferson said:
"I set out on this ground, which I suppose to be self-evident, that the earth belongs in usufruct to the living; that the dead have neither powers nor rights over it. The portion occupied by any individual ceases to be his when he himself ceases to be, and reverts to the society. If the society had formed no rules for the appropriation of its lands in severality, it will be taken by the first occupants. These will generally be the wife and children of the decedent. . . . Then no man can by natural right oblige the lands he occupied, or the persons who succeed him in that occupation, to the payment of debts contracted by him. For, if he could, he might during his own life eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be the reverse of our principle.
"On similar ground it may be proved that no society can be made a perpetual constitution, or even a perpetual law. The earth belongs always to the living generation. They may manage it then, and what proceeds from it, as they please, during their usufruct. They are masters, too, of their own persons, and consequently may govern them as they please. Persons and property make the sum of the objects of government. . . .
"This principle, that the earth belongs to the living and not to the dead, is of very extensive application and consequences in every country. It enters into the resolutions of the questions whether the nation may change the descent of lands holden entail. Whether they may change the appropriation of lands given anciently to the church, to hospitals, colleges, orders of chivalry, and otherwise in perpetuity. Whether they may abolish the charges and privileges attached on lands, including the whole catalogue ecclesiastical and feudal. It goes to hereditary offices, authorities and jurisdictions; to hereditary orders, distinctions and appellations; to perpetual monopolies in commerce, the arts or science; with a long train of etceteras; and it renders the question of reimbursement a question of generosity and not of right. . . . . The present holders, even where they or their ancestors have purchased, are in the case of bona fide purchasers of what the seller had no right to convey."
Jefferson not only recognized the importance of the land question as effecting the welfare of the people, but his prophetic mind sounded this note of warning. "The people will remain virtuous so long as agriculture is our principal object, which will be the case while there remain vacant lands in America. When we get piled on one another in large cities, as in Europe, we shall go to eating one another as they do there."
I'd read some other things by White, but found this particularly compelling and relevant, in the era after the U. S. Supreme Court's decision in the Citizens United case, and as the "Occupy Wall Street" movement grows.
THE DARTMOUTH COLLEGE CASE DECISION.
John Z. White in the St. Louis Mirror of Oct. 4, 1906 With an Introduction by Wm. Marion Reedy, Editor of The Mirror.
Mr. Bryan's proposal of government ownership of railways; Mr. Folk's proposal of taxing corporations upon the actual value of their property, including franchises, or upon the earning capacity as an estimate of valuation; every proposal to do anything to a corporation that the corporation doesn't want done, is met with the proclamation by corporation lawyers: "You can't do it. Marshall's decision in the Dartmouth College case forbids. That decision holds a charter, or a franchise, is a contract, that no State can impair the obligation of contracts. If the corporations aren't willing to submit to those things you can't do them without impairing the obligation of contracts." This Marshall decision is the backbone, the vitality of all corporate power. It is the secret of corporate tyranny over the people. It is the buttress of every corporation iniquity which reformers try to remedy. It is the fetich of all the courts. It is the gospel of all lawyers. It is sacred because it was formulated by Webster, and embodied in the law by Marshall and Story. It has been so for 87 years. But now the law as laid down by these giants is questioned. Their logic is attacked. The conclusions of the Supreme Court that have been held sacred and binding on all courts forever are denied. They are shown to be absurd. With government ownership and corporation regulation the intensely vital issues they have become, we shall hear much of the Dartmouth College decision being as unassailable as Divine Writ. The war of the new democracy, the true republicanism of this day and the future, must be against this decision, which supports all the corporation iniquities and infamies. This article by John Z. White sounds the first note of the battle cry to which all American radicals must rally, for the law of the Dartmouth College decision is the issue upon which both the great parties are to split in such way that all those in both parties who believe in liberty, in the rule of reason, in freedom from the tyranny of "artificial persons" will eventually be in one party, and all the beneficiaries of the tyranny and corruption of artificial persons will be in another party. Marshall's decision has made for the enslavement of men to corporations. It must be reversed and its logic denounced if this government is to fulfil the purposes of its founders or realize the hope and faith of mankind that found expression in the Declaration and in the Constitution.
EDITOR OF THE MIRROR.
* * *
The people of the United States are much disturbed by private monopolies.
Very many, possibly the majority, appear to view the situation as hopeless.
All manner of remedial measures are proposed.
Kansas attempted a public oil refinery; various municipal enterprises are under consideration; it is even suggested that the amount of business that one corporation may do shall be limited to a given fraction of the total business of the country in any particular line; while a message from the President to Congress informs us that state regulation of railroads has thus far achieved but little.
"How not to do it," is still the distinctive characteristic of American public life.
Is the President not aware of the fact that early in our history the Supreme Court adopted a policy and established a precedent that deprived the people of their natural remedy for corporate aggression?
The doctrine affirmed by the decision in the Dartmouth College case is the source of most of our present industrial abuses.
Instead of seeking the overthrow of that doctrine, our so-called statesmen seem bent on devising schemes that admit its truth, but attempt to dodge its consequences.
* * *
Daniel Webster conducted the case for the college.
John Marshall and Joseph Story delivered the principal opinions.
Those opinions were essentially repetitions of Webster's argument.
On fundamental law Blackstone was favorably quoted.
The case is interesting. Story said so, and in this respect his opinion is sound.
* * *
As told by Wheaton, the story is as follows:
In 1754 Dr. Wheelock began teaching the Christian religion to Indian children. He included some white children, and added educational to religious instruction.
The school was charitable, and contributions were sought. Finally the favorable attention of Lord Dartmouth and others in England was secured.
Originally, Dr. Wheelock intended to bequeath the school and its funds to twelve men with power to fill vacancies, that the trust so formed be perpetual.
The English contributors believed an incorporated organization more desirable, and in 1769 there was secured from the English crown a charter.
The "Trustees of Dartmouth College" is formed in harmony with the plan of Dr. Wheelock, being composed of twelve men who, with other privileges, have power to fill vacancies, and thus is self perpetuating.
The charter declares its provisions unalterable by the crown, and that the twelve trustees may make rules and regulations for the government of the college not repugnant to the laws of Great Britain or New Hampshire.
After the Revolution the State of New Hampshire increased the number of trustees to 21, and appointed a board of 25 overseers.
The college corporation resisted this action, and was defeated before the Supreme Court of that State.
The constitution of New Hampshire (art. 15) reads: "No person shall be deprived of his property, or immunities, or privileges, put out of the protection of the law, or deprived of his life, liberty or estate, but by judgment of his peers, or the law of the land."
The New Hampshire court said: "That the right to manage the affairs of this college is a privilege within the meaning of the bill of rights, is not to be doubted. But how a privilege can be protected from the law of the land by a clause in the constitution declaring that it shall not be taken away but by the law of the land is not very easily understood."
Upon appeal to the Supreme Court of the United States it was held that the charter from the crown is a contract, and therefore that said laws are null and void, because in violation of the Constitution of the United States, which reads (art. 1, sec. 10): "No State shall pass any law impairing the obligation of contracts."
* * *
In his contribution to this interesting case Judge Story said: "It is a principle of the common law . . . that the division of an empire works no forfeiture of obviously vested rights of property."
And of course the division of empire does not destroy sovereign power — that power passes, it does not disappear.
The people of England, through their agent, Parliament, as an act of sovereignty, can, could and did revoke grants made by the crown. All grants issued by the crown were and are subject to this condition.
Webster admitted this power of Parliament, but urged that "in modern times it has exercised this power very rarely;" that "even in the worst times this power of Parliament to repeal and rescind charters has not been exercised;" that "Parliament could not annul charters as a matter of ordinary legislation, but only as an act of omnipotent sovereignty;" that "no legislature in the United States has such power."
The people of New Hampshire, by their sovereign agency (legislative, executive and judicial), declared these laws in full force and effect.
When these agree has not sovereignty spoken? What further appeal is possible — save to the mob?
Therefore, unless the Constitution of the United States delegated to the Federal Government power to annul charters, or prohibited it to the States, it has continued to reside in each State as an inherent sovereign right.
The tenth amendment to the Constitution reads: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
There was no pretense that power to annul charters was delegated to the United States, but it was held the clause declaring that "No State shall pass any law impairing the obligation of contracts," is such prohibition to the States.
In our early history some of the States too readily altered the basis of debt liquidation. For this reason this Constitutional prohibition was inserted, and yet this decision pretends that in it is concealed the destruction of a great sovereign prerogative.
And even a hasty perusal of the proceedings of the Constitutional convention show the subject under consideration to have been private contracts.
Even if a grant be absurd or unjust, or secured through corruption, still are the sovereign people helpless. According to this decision there is no power in the United States that can annul charters -- because of a Constitution ordained "to promote tranquillity," and to secure other "blessings."
* * *
The vital question before the Supreme Court, therefore, was -- Is the charter from the crown a contract?
Chief Justice Marshall disposed of the matter by saying: "It can require no argument to prove that the circumstances of this case constitute a contract."
On the contrary, very energetic argument is required; much more forceful than any advanced by either counsel or court.
* * *
As a point from which to view the matter in hand, let us first perceive the conditions of equitable social adjustment.
Blackstone says truly that: "The laws of nature are coeval with mankind and are binding everywhere and at all times," and that "all human enactments derive whatever force and vitality they may have from their conformity to those great originals," and that "any human laws made in contradiction of the laws of nature must eventually fail and become null and void."
As a condition of nature, then, men live on the earth, and must produce things from its materials in order to continue life.
Some, if able, will rob, or wantonly or carelessly injure others, and to prevent such trespass all the people (strictly, the majority) within a given territory organize the police power.
To utilize the earth efficiently it is necessary that parcels be exclusively occupied by individuals. To this end the whole people ordain a method of holding land.
In other words, each man has the right to peacefully occupy and use the earth, and the only known way to maintain this right (security of person and property) is by the exercise of the supreme force.
This supreme force is sovereignty. Sovereignty is dominion; government its organized agency.
States are not corporate agencies to be compelled. They are sovereign agencies that command. They bow not to the past; they rule not the future; but they control the present.
To yield this power in any degree is, in that degree, to yield the only power in nature whereby civilized society is possible.
To argue that sovereignty can, in part, surrender itself, is to argue that a thing can divest itself of its essential characteristics.
If we argue that sovereignty can partly surrender itself, must we not logically agree that it can do so wholly?
Sovereignty is the arbitrary will of the majority, and finds justification for its exercise in the fact that nature (i. e., the constitution of man, together with that of his environment) compels the assertion of that will.
The supreme force is often used to the disadvantage of some, but such act is in violation of natural equity and "must eventually become null and void."
This is nature's social law. "Conformity to this great original" is the State's duty.
* * *
It will be observed that sovereignty does not originate in the divine right of the King, nor in the legislature, nor in the so-called social compact, nor in the conscious contract that James Wilson tried to deduce from the assertion that governments derive "their just powers from the consent of the governed."
Like the right of each man to peacefully use the earth, sovereignty exists of itself. The State is but the agency of sovereignty, organized to conserve this right to peacefully occupy.
Plainly, while a State may contract with a citizen to build a school house, it cannot contract with him regarding matters of sovereignty.
Such act would be an attempt to "agree" that the greatest force is not the greatest force — an attempt in degree to surrender sovereign agency.
A charter gives power to the possessors as against other citizens, but not as against the State.
A State therefore may create a corporation by permitting a group of persons to exercise sovereign powers, but such act is to delegate, not to surrender power. It is a license, a permit — nota contract.
In short, a State may delegate portions of its power, but it can abdicate no part of its sovereign agency.
Any agent may make contracts as to matters in the conduct of business proper to his agency, but who will urge that he may contract away any part of the title to the enterprise itself? Are we to understand that an agent may absolve himself of his agency, in any degree?
A corporation holds power only because it is sustained by sovereignty. It is not only created by law, but also is sustained by law, and has no being save for law.
To admit the power to grant charters and deny the power to annul them, is like admitting the existence of one side of an object while disputing the existence of the other side; or like asserting the positive and denying the negative pole of electricity; or like disputing the similar conversion of a syllogism.
* * *
The Supreme Court was right, when, in the "Slaughter House" and other cases, it held that no part of the police power may be "contracted" away. Each citizen must submit to this phase of sovereign authority.
But is land-holding less a result of sovereignty than police regulations? One may refuse a particular parcel of land, but cannot refuse all land and live. Either as owner or tenant he must conform to the methods ordained. He may, however, refuse to erect any building.
Men and land include all things social, and if sovereignty be asserted as to these it is complete.
* * *
Webster dimly perceived that to contract, all parties must be free to withhold consent, and he said: "What proves all charters of this sort to be contracts is that they must be accepted, to give them force and effect."
Can we not with equal justice say the relation between master and slave is contractual?
The master grants permission to attend a picnic. The slave "accepts" — and we have a contract.
Or, the master commands a like act, and the slave refuses, even preferring death — and no contract results.
Is not the permission or the command without "force and effect" unless the slave "accepts"?
"Accept," says the master, "and live a slave, or fail to 'accept' and die a man."
Corporations live. Men die. Therefore, says the State, according to this decision, accept this charter and live an artificial, immortal person, or fail to accept and die as the God of nature designed in his "great originals."
* * *
If we are agreed as to the nature of sovereignty and its agency, we perceive the validity of the British rule that the Parliament can annul charters. Also we will be able to note the virtue of the positions taken by the court.
Two principal assumptions were made:
First, that land grants are irrevocable. Second, that corporations are persons.
Some positions were evaded, but, on the important matter of "privileges" there is agreement, as follows:
Blackstone said: "Franchise and liberty are used as synonymous terms, and their definition is, a royal privilege, or branch of the King's prerogative, subsisting in the hands of the subject."
Webster quoted Prof. Sullivan as saying that, "The term liberty signifies the privileges that some of the subjects, whether single persons, or bodies corporate, have above others, by the lawful grant of the King."
Webster then said: "The plaintiffs have such an interest in this corporation."
Privileges, then, are partialities, favoritisms, "grants of the King's prerogative," "advantages that some have above others."
Per contra: They are handicaps, burdens, oppressions, tyrannies upon those same "others."
"What is one man's privilege is another man's right," is a wise saying attributed to Andrew Carnegie.
Of corporations Justice Story said: "An aggregate corporation at common law is a collection of individuals united into one collective body, under a special name, and possessing certain immunities, privileges and capacities in its collective character which do not belong to the natural persons composing it. . . . It is in short an artificial person, existing in contemplation of law, and endowed with certain powers, and franchises, which, though they must be exercised through the medium of its natural members, are yet considered as subsisting in the corporation itself, as distinctly as if it were a real personage."
Marshall said of this corporation: "An artificial immortal being was created by the crown, capable of receiving and distributing forever, according to the will of the donors, the donations which should be received by it."
And said Webster: "A grant of corporate powers and privileges is as much a contract as a grant of land."
"Was it ever imagined," asked Story, "that land voluntarily granted to any person by a State was liable to be resumed at its own good pleasure?"
The nature of privileges is agreed to; also that corporations hold privileges; also that "a grant of franchises is not in principle distinguishable from a grant of any other property," as asserted by Story.
But cannot the State take the physical thing, land, under power of eminent domain; and did not John Marshall say, in Providence Bank v. Billings (4 Peters, 562), referring to a land grant, that: "This grant is a contract, the object of which is, that the profits issuing from it shall inure to the benefit of the grantee? Yet the power of taxation may be carried so far as to absorb these profits. Does this impair the obligation of contracts? The idea is rejected by all," etc.
If the State can take the land under condemnation, and its value (profits) by taxation, what becomes of the contention of Webster and Story that land granted may not be resumed? And we are all agreed that land grants and franchises stand or fall together.
Thus one principal assumption is destroyed. It has no validity in reason, and from a different point of view, as shown in the case cited, even Marshall was able to perceive the truth.
* * *
The second principal assumption was necessary to the conclusion, because if the corporation was not a "person," there was no party with whom the crown might contract.
It is agreed that a contract is "an agreement between two or more persons to do or not do a particular act."
As a corporation does not exist until the charter issues, it would seem that, if the charter is a contract, the corporation must be a party to its own creation.
Perhaps the State creates a corporation, or artificial person, and then contracts with that artificial person to do what it has already done, viz., create a corporation.
Story dealt with this point in the following manner:
"From the nature of things, the artificial person called a corporation must be created before it can be capable of taking anything. When, therefore, a charter is granted, and it brings the corporation into existence without any act of the natural persons who compose it, and gives such corporation any privileges, franchises, or property, the law deems the corporation to be first brought into existence, and then clothes it with the granted liberties and property. . . . There may be, in intendment of law, a priority of time, even in an instant, for this purpose."
The corporation must exist before it is "capable of taking anything."
Certainly; and it must "be" before it can contract to "be." To "be" is one of its liberties, and all of its liberties are in the "contract."
As Marshall said: "A corporation is an artificial being, invisible, intangible, and, existing only in contemplation of law, it possesses only those properties which the charter expressly confers upon it."
One of which properties is to "be." "The law deems the corporation to be first brought into existence and then clothes it," etc. Never mind about clothing it. Get the thing born first — as a contract.
Story said those who oppose his view should "consider whether or not they do not at the same time establish that the grant itself is a nullity for precisely the same reason."
As a contract, we do establish "precisely" that.
* * *
Story had yet another line of approach. He said: "An executory contract is one in which a party binds himself to do or not to do a particular thing. An executed contract is one in which the object of the contract is performed."
The non-professional mind can readily perceive how one may contract to make a pair of boots, or to sell or to deliver a pair, but how can one contract to make a pair that is already made?
Seemingly, in the court's view, a charter is an executed contract. That is, "the object of the contract is performed." But this does not relieve the situation. For, even though the making and the performance of the contract be simultaneous, there can be no contract without parties, and the corporation or artificial person does not exist until the charter issues.
Not only is the "person" artificial but the whole concept is artificial and woodeny and bears no semblance to those "great originals" to which Blackstone rightly declared all permanent law must conform.
One feels impelled to warn the profane reader that this is not a discussion of farce-comedy.
* * *
The facts in the case appear simple enough, before Webster indulged in intellectual gymnastics, or the court applied its alchemy.
It seems that a group of persons applied for, and received, "an advantage above others," a "branch of the King's prerogative," or a privilege sustained by sovereign power, that is, a charter.
The grant being secured, the group thereby becomes an organisation of persons upon whom the State has conferred certain specified favors.
If the corporation is an artificial person "in contemplation of law," it can be very bluntly be asserted that the law assumes as true what is not true, but is absurd.
When told that in the eye of the law his wife supposed to act under his direction, Mr. Bumble replied: "If the law supposes that, the law is a ass — a idiot. If that's the eye of the law, the law's a bachelor; and the worst I wish the law is, that his eye may be opened by experience — by experience."
We are getting experience, and it is to be hoped our eyes will open. Mr. Bumble's estimate of the law was, in some respects, extremely accurate.
The second assumption seems untenable, and with its dismissal the case vanishes.
A corporation is an organization — not an organism, and certainly not a person.
Its charter is but the expression of the grant of authority conferred. If the State has power to confer, it also has power to withhold or withdraw — that is, to annul. Unless, of course, there is some power in government greater than sovereign agency.
* * *
Story suggested that power to annul charters might be reserved by the legislature, either in each charter or a general law.
Such reservation surely cannot give to a legislature a power not already possessed. Otherwise an act may not only tend, as Webster feared, but easily secure, "the union of all powers in the legislature."
And if the legislature cannot so add to its own powers, but can by act secure the reservation, does it not follow that the reservation exists regardless of the act?
Does a legislature possess power through contract with individual citizens, or is its power delegated to it by the sovereign people?
After agreeing to the nature of privilege, and listening to the definition of corporations, and observing Justice Story's assurance that these grants imply on the part of the grantor "a contract not to reassert the right" (although it is agreed that Parliament can annul), and being told that "the only effect of the charter was to give permanency to the design;" in fact, being duly impressed with the solemnity of the whole proceeding (and why should not artificial, immortal beings be viewed with awe?), we are suddenly startled by Marshall's assertion that "From the fact that a charter of incorporation has been issued nothing can be inferred which changes the character of the institution or transfers to the government any new power over it."
If this assertion is true, why do men seek charters?
If the character of the institution was not changed, what contract was made?
And what did Story mean in saying that a corporation possesses "certain immunities, privileges and capacities in its collective character which do not belong to the natural persons composing it"?
We must infer a change in the character of the institution, and that change is the possession of political powers not before held.
It is these political powers that Story said "do not belong to the natural persons composing" the corporation.
These "branches of the King's prerogative" are political because the whole of the King's prerogatives are political. The State is political. It has political power only to give.
It was to this sort of power that Webster referred when, after describing privilege, he declared that his clients "have such an interest in this case."
The character of the institution was changed by the exchange of a private for a public administrator. All corporations are public for the reason that all their powers are derived from the State. Corporate powers are part of the State — (sovereign powers subsisting in the hands of the citizen, — to use our terms in place of the British form).
On the same point Mr. Hopkinson, of counsel for the college, asked: "If the property of this corporation be public property, when did it become so? It was once private property; when was it surrendered to the public?"
The property was not surrendered to the public, but its administration was given to the public by the voluntary act of its owners.
The owners preferred to entrust it to a publicly established agency (viz., the corporation), rather than to leave it by bequest to private parties, in accord with the original intention of Dr. Wheelock.
* * *
Distinguishing between public and private corporations and indicating that the physical property with which a college corporation is endowed is called its "foundation." Story said: "If the foundation be private, though under the charter of the government, the corporation is private, however extensive the uses may be to which it is devoted, either by the bounty of the founder, or the nature and objects of the institution."
And in this class of private corporations he places hospitals, banks, canals, insurance, turnpike and bridge companies.
This conclusion gives to a corporation the character of its physical property, while common sense asserts its character to be that of the source of its authority.
It is a corporation because the State created it. Is it not more in harmony with right reason to say, ''if the grant be from the public, the corporation is public, however slight be the uses to which its political power is devoted"?
Do the privileges of a corporation spring from its foundation, or from the State?
Its power "to be" is of the State; its permanence, or "immortality," is of the same source.
How can we say that the privileges of a corporation are sovereign powers in the hands of a citizen, and at the same time say the corporation is private?
To classify corporations as civil and eleemosynary, or as public and private, is to divide them according to their uses, and is entirely proper as an aid to convenient identification; but to make this classification on the basis of philosophical distinction is merest twaddle.
A corporation is a group of persons holding "privileges," and the nature of privileges is agreed to. Whether the corporation is used to conduct a Sunday school, a great city, a railroad, or a manufacturing plant is immaterial.
A gun, whether a toy pistol or the most improved rifle, is still a gun; and whether in the hands of an honest man defending his home, or in the hands of a highwayman attacking his victim, it is still a gun.
A corporation holds political power. Its power to "be" is political. And all the fancy balancing indulged by counsel and court operates to conceal, not to destroy, this truth.
* * *
The New Hampshire court, as before stated, said it was difficult to understand "how a privilege can be protected from the law of the land by a clause in the Constitution declaring that it shall not be taken away but by the law of the land."
In reply Webster quoted Blackstone as follows: "And first it (i. e., the law), is a rule; not a transient or sudden order from a superior, to or concerning a particular person; but something permanent or universal. Therefore a particular act of the legislature to confiscate the goods of Titus or to attaint him of high treason does not enter into the idea of a municipal law; for the operation of this act is spent on Titus, and has no relation to the community in general; it is rather a sentence than a law."
Webster added, "Everything that may pass under the form of an enactment is not therefore to be considered the law of the land. Such construction would render constitutional provisions of highest importance inoperative and void."
All of which is true, but the case in hand is an instance of the "universal and permanent" rule that sovereignty can annul charters.
Webster seems to have dodged the issue, or begged the question; which reminds us that of one of counsel's arguments Story said, "The fallacy of the argument consists in assuming the very ground in controversy."
This is precisely the method of the court throughout most of this case.
Many eminent authorities, voicing sound doctrines as to the proper relation between sovereignty and the person, were quoted — and then the doctrines were applied to corporations.
Herein lies the plaintiff's need for asserting corporations to be persons — and herein is the lameness of this absurd decision.
* * *
In conclusion, sovereignty is not a subject of contract.
Nature forces the majority to be sovereign. Sovereignty of necessity relates to persons and to land.
These two exist of themselves. All else in the social state is subsidiary.
The whole string of sophistries indulged by the court were to the end that these simple truths be submerged.
It is only as these simple truths are clearly apprehended that social freedom is possible. Marshall was a Tory. His whole career proves it. A Tory is not a friend of freedom.
The truth is that power to regulate corporations or annul their charters inheres in each State — save for this precedent.
Deprived of this power by this invasive rule, the people flounder on, rapidly losing faith in the great American experiment.
Does anyone doubt that our Western States would long since have regulated railroads and other corporations in the interest of common honesty if the group of attorneys called the Supreme Court did not bar the way?
The people think they live under the Constitution, in fact, they live under Marshall's decisions.
If it were not for the slavish submission of the present court to the name of Marshall, would we need to be outraged by the spectacle of sovereign States like Idaho, Montana and Colorado in the West, and Pennsylvania and New Jersey in the East, lying bound at the feet of a lot of soulless corporate pirates, as reckless of human rights as any horde that ever sailed the Spanish Main?
Let the court confine itself to its own affairs, and leave the States to attend to theirs.
The decision was in degree destructive of the rights of the States (which in itself is of no moment), and thereby of the people's rights (which is of great moment).
It was not adjudication. It was usurpation. Thus far it has been endured.
One Judge dissented. Let us revere his name — it was Duvall.
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.
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?
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?
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.
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?
I had the pleasure of stumbling across a piece of writing from about 100 years ago. It is in one of quite a large number of books written by enthusiastic admirers of the ideas of Henry George, put online by Google Books. This is from a book by one James Love (written under a pseudonym). I've reformatted it a bit to make it easier to read here. It is a good summary of "Progress and Poverty," still the best book I know on political economy and economic justice -- why we suffer from wealth concentration, income concentration, poverty, sprawl, and a number of our other most serious social and environmental problems. Here's the excerpt; read it slowly and consider its implications!
This man, who I believe to be the completest in thought and language that the world has seen, and his book the most precious ever given by man to men, concludes
that the world (even more necessary to our existence than our own bodies are) is intended for all men of all generations, and not for some men alone.
That every human being born into the world has a natural right in it equal to that of every other human being born into it.
That as man by his nature seeks to gain his ends in the easiest way, some parts of the earth on which he can accomplish much become more desirable than other parts on which he can accomplish less.
That this varying desirability, causing competition for the use of certain lands, shows itself in "rent," which is thus a communal product, and as clearly belongs to communities as the remainder of the produced wealth belongs to the individual producers.
That it is as impolitic and unjust to take from the individual for the use of the community what has been produced by the individual as it is impolitic and unjust not to take for the use of all, or of the community, that which is produced in common by the community.
That, in short, "rent" is the natural, God-intended fund for general public use. And
that in denying this moral law of equal rights to land there is brought about a pitiful inequality of true wealth, and a sordid struggle for existence, destructive of human freedom and eventually bringing progress to a halt.
And that we are at last learning that in setting up "vested rights" — based whether on ancient force or ancient law — developed into modern custom — and denying this equality, we rob men and deny the truly sacred right of every man to the product of his labor; deny the sacred right of property in "wealth."
And that in treating private property in land as sacred (worse than treating property in man as sacred) "there never was a more degrading abasement of the human mind before a fetich."
But that, on the contrary, "by conforming our institutions to this divine law of justice we will bring about conditions in which human nature can develop its best;
will permit such enormous production of wealth as we can now hardly conceive;
will secure an equitable distribution;
will solve the labor problem and dispel the darkening clouds now gathering over the horizon of European civilization.
We will make undeserved poverty an unknown thing;
will check the soul-destroying greed of gain, and
will enable men to be at least as honest, as true, as considerate and highminded as they would like to be.
We will open to all, even the poorest, the comforts and refinements and opportunities of an advanced civilization; and
we will thus, so we reverently believe, clear the way for the coming of that kingdom of right and justice, and consequently of abundance and peace and happiness, for which the Master told his disciples to pray and work."*
* "The strength of ' Progress and Poverty' is not that it restated fundamental truths which others had before stated. It is that it related these truths to all other truths. That it shattered the elaborate structure that under the name of 'Political Economy' had been built up to hide them, and restoring what had, indeed, been a dismal science to its own proper symmetry, made it the science of hope and of faith." —Reply to charge of plagiarism.—Henry George.
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. FederalElections 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.