LVTFan's Blog

Monkeys and Men

MONKEYS AND MEN.

Go to the monkey, thou voter! Consider his ways and be wise.

Do the monkeys pay ground rent to the descendants of the first old ape who discovered the valley where the monkeys live?

Do they hire the trees from the chimpanzee who first found the forest?

Do they buy the coconuts from the great-great-grandchildren of the gorilla who invented a way to crack them?

Do they allow two or three monkeys to form a corporation and obtain control of all the paths that lead through the woods?

Do they permit some smart young monkey, with superior business ability, to claim all the springs of water in the forest as his own, because of some alleged bargain made by his ancestors 500 years ago?

Do they allow a small gang of monkey lawyers to so tangle up the conceptions of ownership that a few will obtain possession of everything?

Do they appoint a few monkeys to govern them and then allow those appointed monkeys to rob the tribe and mismanage all its affairs?

Do they build up a monkey city and then hand over the land, and the paths, and the trees, and the spring, and the fruits of a few monkeys who sat on a log and chattered while all the work was going on?

No, my friend, monkeys have a wiser system of municipal government than that.

Although Kipling speaks of them in his jungle book as “the people who have no law,” yet they have laws enough to prevent the private ownership of public franchises.

If Professor Garner, who claims to have learned 40 words of the monkey language, were to escort some reflective chimpanzees around one of our cities, the professor would find it rather difficult to explain some of the manners of a civilized nation.

The chimpanzee would be amazed to see a $500,000 house, with 40 rooms, contain only a millionaire and his wife and ten servants, while a $10,000 tenement, with twenty rooms, contained forty people and no servants.

He would be still further astonished to see the warehouse district, where an abundance of everything was stored, close to the slum district, where the people lacked the barest necessities of life.

He would be shocked to see an entire street railroad system, with hundreds of miles of tracks, thousands of cars and employees, and carrying millions of passengers every year, absolutely owned and controlled by three or four men who never built a car or drove a spike.

But when the professor would explain to him that nine-tenths of the people in the city were quite content to endure such evils, and, in fact, grew angry with anyone who proposed to remove them, the chimpanzee would say: “Take me back to the forest, and may the Good Spirit deliver us from civilization.”

—The Coming Nation.

quoted in 1898-12-10 Oakland Tribune, Edgar Pomeroy's column.  Shorter versions, ending with "Do they build up a monkey city and then hand over the land, and the paths, and the trees, and the spring, and the fruits of a few monkeys who sat on a log and chattered while all the work was going on?" have appeared in various places. 

Henry George's book The Land Question has a chapter entitled "The Great-Great-Grandson of Captain Kidd," (page 37) which made some similar points about vested interests and privilege.  See also Uncivilized, and a few entries down from this one, Squirrel Island.  In the same spirit, look for Bolton Hall's parables.

Single Tax Challenge

This appeared in the San Francisco Call 1898-10-12.  The claims he makes for the Single Tax start with one to which many 21st century folks would at first hearing, think "non-starter."  But I urge you to think further, and think about what expensive land means to most Americans, and how it makes the lives of some -- many! -- very difficult, while greatly enriching a "lucky" few.   A reform which "cheapens" land will go a long way to putting millions of people to work and self-sufficient.

SINGLE TAX CHALLENGE.

Editor Call: So repeated have been the attacks and misrepresentations of the single tax theory in The Call and other papers of late that, as a member of the Alameda County Single Tax Society, I feel bound to request the liberality of your paper to make a few pertinent propositions.

As single taxers many of us regret the action of the Republican party in their State convention in inserting an anti-single tax plank In the State platform. Such action will force many single tax Republicans in this election to vote against their own party.

It is not, however, of such vital interest to single taxers as to which political party is for or against the single tax as it is that the theory of Henry George should be understood and intelligently discussed. Up to the present editorials have been woefully at sea in the presentation of the single tax proposition, and naturally the deductions have been equally erroneous, and platform speakers also seem wretchedly ignorant of what the single tax: is and what the results of its adoption would be. General Barnes contents himself with calling it names; Mr. Gage says it is a proposition to tax realty and improvements only.

Now, in order to test the knowledge and encourage the exercise of thought on the part of random writers and ravers, and to put the subject squarely before the people—in other words, in order to give the single tax a fair, square hearing—I make the following claims for the single tax and challenge denial or adverse argument. The single tax would:

First    —       Cheapen land.
Second    —   Would encourage industry.
Third     —     Discourage speculation.
Fourth    —    Raise the wages of labor.
Fifth       —    Increase the earnings of capital invested in industry.
Sixth        —   Reduce the California farmers’ taxes to a quarter of the present tax they pay.
Seventh    —   Prevent one man living off another's labor, except by charity.
Eighth    —     Destroy monopoly.
Ninth    —      Abolish the "lobby.”
Tenth    —      Raise the wages to the full product of labor.
Eleventh—     And could not be shifted.

It seems to me that the above is a fair target for anti-single taxers. The only difficulty the antis will have will be to keep the thought out of their answers. When an anti-single taxer begins to think he is in danger, and if he keeps on thinking, he is lost to the antis and becomes as rabid as any of us.

Trusting that you will give your anti-single tax editor, orators and readers an opportunity to confute the above statements, and also permit reply. I am, sir. 

EDGAR POMEROY
Oakland, October 10.

Squirrel Island

http://www.cooperative-individualism.org/freeland-a_squirrel-island-191x.pdf

SQUIRREL ISLAND

By A. FREELAND.

One hundred squirrels lived on a certain island which contained a thousand nut trees. Each tree yielded sufficient nuts to support one hundred squirrels. But all of the trees were owned by ten of the squirrels. The ninety treeless squirrels rented portions of trees from the ten treelords, paying part of the nuts they gathered. The treelords did no work, but kept fat and sleek, while the treeless squirrels were very poor, both physically and financially.

One of the working squirrels invented a machine for gathering nuts. The ten treelords formed a company and paid the inventor a peck of nuts for his patent, and promised him steady employment at higher wages.

Thirty squirrels, aided by the machines, could gather as many nuts as were formerly gathered by all the working squirrels. Sixty squirrels were thus thrown out of employment. Thirty of these eventually secured employment as menials in the households of the treelords. They became cooks, flunkys, coachmen, footmen, etc., at a very low wage. The remaining thirty unemployed squirrels subsisted on charity or by theft, some actually dying of starvation.

Owing to the diminished demand for nuts, because so many were unable to buy what they needed, there was soon an “overproduction" of nuts, and the treelords were obliged to “shut down" a part of the time, thus throwing many more of the treeless squirrels out of work.

Competition among treeless squirrels for employment became exceedingly fierce and wages steadily fell. Some of the squirrels organized a union and struck for higher wages, but there were plenty of unemployed squirrels who were willing to work for the low rate. These “scab" workers were hired in place of the strikers. The latter did not relinquish their jobs without a struggle. Riots ensued, in which several of the “scabs’’ and strikers were killed.

A charitable society was organized which doled out every day a nutshell full of nut-soup to the unfortunates. The government also established a rock-pile and a public wood-yard, where unemployed squirrels could secure half of an inferior nut in return for breaking a basketful of rocks or gnawing off six double-armfuls of wood. In this way, although the majority of the squirrels were always on the verge of starvation, very few getting enough to eat, it was seldom that one actually starved. Of course their lives were shortened, but that was due, it was said, to inexorable and unavoidable conditions over which squirrels has no control.

The unemployed squirrels and those receiving meager pay began to murmur. Even some of those who operated machines were touched by the sufferings of their fellows and suggested that something must be wrong on an island which yielded sufficient nuts to feed 100,000 squirrels and yet did not support 100.

Some attributed their woes to the single nut standard; others asserted that their condition was due to the importation of pauper cracked nuts from foreign islands; still others that it was because some of the squirrels drank rain-water.

Some suggested that the hours of labor of working squirrels should be shortened, thus making work for more squirrels; others that pauper squirrel immigration should be prohibited, while a pious squirrel declared that times always would be hard so long as some of the wicked squirrels persisted in working on the Sabbath.

Many demanded an income tax of two nuts annually from each of the treelords, the revenue from such source to be given in bounties to nut-tree owners to encourage the production of nuts.

Some contended for the free and unlimited coinage of nut-shells at the ratio of sixteen nut-shells to one nut, while others asserted with considerable unction that green nut-tree leaves were the only safe, sound and flexible currency. They demanded national greenleaf money sufficient in volume to transact the business of the island on a cash basis—not less than fifty greenleaves per capita—declaring that to be the only means of restoring prosperity to the island.

To elevate the standard of citizenship, as a prerequisite to the right of franchise, a poll tax was proposed, the argument being adduced that any squirrel who would not pay for the privilege of wearing a head on his shoulders could not possibly be a good citizen.

There was a popular demand for legislation against the basket and wood trusts, which, it was claimed, were ruining the island by lowering wages and raising prices.

The treelords and the pious squirrels declared that there always were poor squirrels and always would be; that it was an inscrutable decree of Providence that some (the idlers) should be rich and the others (the workers) poor, some masters and others servants.

Many clamored for common ownership of the machines, maintaining that all the ills that were befalling treeless squirrels were the result of machinery displacing labor.

A single-tax squirrel mildly suggested that there were sufficient nut trees on the island to support in comfort 100,000 squirrels; that the treelords did not create the nut trees; that if nut-tree monopoly were abolished there would be plenty of nuts, not only for the squirrels then on the island, but for all the other squirrels on all the other islands; that then any thrifty squirrel or association of squirrels could make machines or hire them made, and the hours of labor would be reduced without legislative enactment.

Immediately there were cries from all quarters: “Anarchist! Socialist! Communist! Thief! Robber! Traitor! Revolutionist! Confiscator! Agitator! Hang him! Throw him to the sharks!" etc. So he wrote this letter.

THE JOSEPH FELS FUND OF AMERICA
Cincinnati, Ohio
Price 10 Cents Per Hundred.

 

We don't know who A. Freeland is, but there is reason to think that Louis Freeland Post could have been the author.  In The Standard, there were a couple of articles signed by "Lewis Freeland."   See "A Mysterious Disappearance," in Issue #013, 1887-04-02 and  "Lavender's Yarn," in Issue #025, 1887-06-25.

 

See also Edward Vance Cooke's poem, "Uncivilized" and J. W. Bengough's "A Poem of Political Economy"

 

 

Poem: Mary and Her Landlord

From The Sacramento Bee, July 18, 1900:

Mary and Her Landlord

Mary opened a little shop
  To help her on life's way:
And honest toil found its reward
  And it began to pay.

“How's biz?" the landlords often asked,
  And Mary was imprudent;
Of course she never guessed he was
  An economic student.

But Mary's landlord's eagle eye
  Was watching how thing went,
And when the 1st of May came round
  He doubled Mary's rent.

John Farrell, The Philosophy of the Single Tax, Part VIII: Monopoly, and How It Works

The Daily Telegraph (Sydney, NSW: 1883-1930)  Sat 25 Jan 1890  Page 5  

The Philosophy of the Single Tax.

By J. Farrell.

 

No. VIII. Monopoly, and How It Works.

 

In the beginning there was neither exchange nor capital. Primitive man had to face life with no other help than his hands, and satisfy his primitive wants as best he might. Each had access to everything he found existing that could serve his purpose. After a time it was found that one had different capacities from another. One excelled in tilling the soil, perhaps, and another in catching fish. Both wanted fish and bread, and it occurred to both that if the fisherman kept solely to fishing and the agriculturist solely to farming they could each, by exchanging their produce, get the best return for a given amount of labor. The fisherman found out, too, that by devoting a certain part of his work to making nets he could secure more fish in a day with that time deducted from it than he could in a full day's fishing on the old principle. The farmer made a similar discovery in regard to making implements for his own assistance. Thus capital made its first appearance. The fisherman and the farmer in turn found that someone also could make nets or implements better than they, so they exchanged fish and wheat with such makers, who could not produce either for themselves directly with such advantage, for nets and implements, to the gain of all parties. That is a true statement of the case of labor, capital and exchange, and of the relation they bear to each other. Let progress and invention go on to infinity under the conditions I have stated — equal access to all needful raw material — and that relation could not be in the smallest degree changed. It is natural cooperation of production. Every labor-saving invention in conferring gain on the user would confer it upon all others within the circle of exchange by reducing the amount of labor consumers would have to give, in the shape of their own products, for the products cheapened by the labor-saving machines. As I have before pointed out, no one could benefit himself except by benefiting others.

But monopoly soon found out a vulnerable spot and fastened upon it. It secured the raw material from which not only fish or wheat could be produced by labor, but the capital, such as nets and implements, which would add to its productive power. It said, "labor and capital can only exist and prosper by employing themselves in producing wealth and doing good. I will exist and prosper by preventing their operations." After having entered into possession of the best points of production (which involve those of exchange and distribution) it began to produce, exchange or distribute with its labor or capital. This labor

Basic Principles of Ground Lease Agreements – Yes, a Contract!

Here are the opening paragraphs of a recent article about the complexities of Ground Lease contracts.  I commend the entire article to your attention.  It helps flesh out why and how the entire FIRE sector -- Finance, Insurance and Real Estate (as well as their attorneys) --  is receiving such a large share of the profits produced by the productive sectors of the economy.  The owner of land, and the entities which lend on land, and insure the buildings and the revenue flow, all reap significant shares of what the tenants labor to create.   Modern sharecropping.  And the recipients of the ground rent get to parade as self-made men, people of awesome foresight and wisdom -- and even philanthropists (think Brooke Astor, the Fishers, and others in your own community) when they donate a small share back to a charity!  As you read this, think both of Manhattan land and of land in your community's central business district, and along its major roads.  (Location, location, location!)

If one wonders why (true) small business struggles, one might consider the complexity and expense of their ground leases, and contrast that with the Georgist alternative: that one's taxes would be simply the current rental value of the land, while the value of the building remains one's private property, not subject to taxation or going pouf! at the end of a ground lease.

The land lord is "supplying" something he didn't create.  We ought to ease him out.  Land value taxation is the obvious tool for reducing, and -- slowly or not -- eliminating, his "take" on those who do create.  Think what it would mean if working people had that spending power, instead of the lords of the land.

All that land rent could be used to fund our community's needs, instead of lining the pockets of a few very "lucky" -- privileged -- duckies.  (The analogies to chattel slavery are not a long stretch, once one starts to think about it.  We should all own ourselves, and reap the fruits of our own labors.)

Basic Principles of Ground Lease Agreements – Yes, a Contract!.

PUBLISHED: JANUARY 7, 2013  

A lease is a lease is a lease – or so you may think. Yes, real property leases grant an estate in land to a tenant for a period of time. And yes, the tenant pays for that right of possession. But the action in a lease isn’t in the conveyance provisions; it’s in the contract provisions. Multiply out the rent and other annual monetary obligations by the length of the lease term (in years), and you’ll see that it might be (and often is) a big dollar contract. Even more important, unlike the vast majority of contracts whose obligations are satisfied in days or weeks, a lease contract goes unfulfilled for 50, 75, “99,” and even 500 years. That takes it beyond the life of the parties involved in its creation, and the future brings surprises. Neither Nostradamus nor Jules Verne got everything right. 

Why a Ground Lease? 

If a tenant has to build its own building (as is often the case), and has all of the burdens of ownership, why would it lease a property knowing that at the end of the lease term it has nothing left to show for its money and efforts? There are a number of common reasons, principal among them is that the owner won’t sell the land and the tenant has no alternative. 

Real property often carries a long term unrealized gain, waiting to be taxed upon its sale. 

Not every landowner is interested in making further active real property investments. This makes a like kind exchange unappealing. 

Ground leasing the same land keeps ownership in the family. At the owner’s death, because of the current estate tax “stepped up basis” arrangement, the built in gain may never be taxed.

continue reading

The Earth-for-All Calendar: Undecimber 7 -- Renan

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.

—Ernest Renan, "Life of Jesus," Chapter X.

Henry George's chapter in McNeill's "The Labor Movement: The Problem of Today" (1887)

I stumbled across an excerpt from this in The American Cooperator, and when I couldn't find the material in any of George's other books, I went looking for the source, an 1887 book with chapters by 16 authors.  

Enjoy!  (It prints out as about 9 pages, if you're so inclined)

http://archive.org/stream/labormovementpro00mcneiala/labormovementpro00mcneiala_djvu.txt

THE LABOR MOVEMENT;
THE PROBLEM OF TODAY.

THE HISTORY, PURPOSE AND
POSSIBILITIES OF LABOR ORGANIZATIONS
IN EUROPE AND AMERICA; GUILDS, TRADES-
UNIONS, AND KNIGHTS OF LABOR; WAGES AND PROFITS;
HOURS OF LABOR; FUNCTIONS OF CAPITAL; CHINESE LABOR:
COMPETITION; ARBITRATION; PROFIT-SHARING AND
CO-OPERATION; PRINCIPLES OF THE KNIGHTS OF
LABOR; MORAL AND EDUCATIONAL AS-
PECTS OF THE LABOR QUESTION.

EDITED BY GEORGE E. McNEILL,
First Deputy of Mass. Bureau of Statistics of Labor; Sec.-Treas. of D. A. 30, Knights of Labor.

ASSOCIATE AUTHORS: TERENCE V. POWDERLY, G. M. W., K. of L.; DR. EDMUND J. JAMES, University of Pennsylvania; HON. JOHN J. O'NEILL, of Missouri; HON. J. M. FARQUHAR, of New York; HON. ROBERT HOWARD, of Massachusetts; HENRY GEORGE, of New York; ADOLPH STRASSER, Pres. Cigar Makers' Union; JOHN JARRETT, of Pennsylvania; REV. R. HEBER NEWTON, of New York; F K. FOSTER, of Massachusetts; P. M. ARTHUR, Chief Engineer Locomotive Brotherhood; W. W. STONE and W. W. MORROW, of California; FRANKLIN H. GIDDINGS, "Springfield Union"; JOHN McBRIDE, Secretary Coal Miners' Union; D.J.O'DONOGHUE, of Toronto, Canada; P. J. McGUIRE, Secretary Carpenters' Brotherhood, Ohio.

NEW YORK: THE M. W. HAZEN CO.
1887.

Copyright 1886, by
A M. BRIDGMAN & CO.

CHAPTER XXIII.  THE LAND QUESTION.

MAGNITUDE OF THE QUESTION — FIRST PRINCIPLES — THE LAND-OWNER THE ABSOLUTE MASTER OF MEN WHO MUST LIVE ON HIS LAND — THE ORDER OF NATURE INVERTED — EQUAL RIGHTS TO THE USE OF THE EARTH — SELFISHNESS, THE EVIL GENIUS OF MAN — THE IRISH PEOPLE FORCED TO BEG PERMISSION TO TILL THE SOIL — APPROPRIATION OF THE CHURCH-LANDS — LAND IN ITSELF HAS NO VALUE — THE GREAT CAUSE OF THE UNEQUAL DISTRIBUTION OF WEALTH — NO HOPE FOR THE LABORER, SO LONG AS PRIVATE PROPERTY IN LAND EXISTS — NOTHING MYSTERIOUS ABOUT THE LABOR QUESTION — THE DIFFICULTY IN FINDING EMPLOYMENT — NATURE OFFERS FREELY TO LABOR — NATURAL MEANS OF EMPLOYMENT MONOPOLIZED — SPECULATION IN THE BOUNTIES OF NATURE.

BENEATH all the great social questions of our time lies one of primary and universal importance, the question of the rights of men to the use of the earth.

The magnitude of the pecuniary interests involved, the fact that the influential classes in all communities where private property in land exists are interested in its maintenance, lead to a disposition to ignore or belittle the land question: but it is impossible to give any satisfactory explanation of the most important social phenomena without reference to it; and the growing unrest of the masses of all civilized countries, under conditions which they feel to be galling and unjust, must at length lead them, as the only way of securing the rights of labor, to turn to the land question.

To see that the land question does involve the problem of the equitable distribution of wealth; that it lies at the root of all the vexed social questions of our time, and is, indeed, but another name for the great labor question in all its phases, it is only needful to revert to first principles, and to consider the relations between men and the planet they inhabit.

We find ourselves on the surface of a sphere, circling through immeasurable space. Beneath our feet, the diameter of the planet extends for eight thousand miles; above our heads night reveals countless points of light, which science tells us are suns, that blaze billions of miles away. In this inconceivably vast universe, we are confined to the surface of our sphere, as the mariner in mid-ocean is confined to the deck of his ship. We are limited to that line where the exterior of the planet meets the atmospheric envelope that surrounds it. We may look beyond, but cannot pass. We are not denizens of one element, like the fish; but while our bodies must be upheld by one element, they must be laved in another. We live on the earth, and in the air. In the search for minerals men are able to descend for a few thousand feet into the earth's crust, provided communication with the surface be kept open, and air thus supplied; and in balloons men have ascended to like distances above the surface; but on a globe of thirty-five feet diameter, this range would be represented by the thickness of a sheet of paper. And though it is thus possible for man to ascend for a few thousand feet above the surface, or to descend for a few thousand feet below it, it is only on the surface of the earth that he can habitually live and supply his wants; nor can he do this on all parts of the surface of the globe, but only on that smaller part, which we call land, as distinguished from the water, while considerable parts even of the land are uninhabitable by him.

By constructing vessels of materials obtained from land, and provisioning them with the produce of land, it is true that man is able to traverse the fluid-surface of the globe; yet he is none the less dependent upon land. If the land of the globe were again to be submerged, human life could not long be maintained on the best-appointed ships.

Man, in short, is a land-animal. Physically considered, he is as much a product of land as is the tree. His body, composed of materials drawn from land, can only be maintained by nutriment furnished by land; and all the processes by which he secures food, clothing and shelter consist but in the working up of land or the products of land. Labor is possible only on condition of access to land, and all human production is but the union of land and labor, the transportation or transformation of previously existing matter into places or forms suited to the satisfaction of man's needs.

Land, being thus indispensable to man, the most important of social adjustments is that which fixes the relations between men with regard to that element. Where all are accorded equal rights to the use of the earth, no one needs ask another to give him employment, and no one can stand in fear of being deprived of the opportunity to make, a living. In such a community, there could be no "labor question." There could be neither degrading poverty nor demoralizing wealth. And the personal independence arising from such a condition of equality, in respect to the ability to get a living, must give character to all social and political institutions.

On the other hand, inequality of privilege in the use of the earth must beget inequality of wealth and power, must divide men into those who can command and those who are forced to serve. The rewards which nature yields to labor no longer go to the laborers in proportion to industry and skill; but a privileged class are enabled to live without labor by compelling a disinherited class to give up some part of their earnings for permission to live and work. Thus the order of nature is inverted, those who do no work become rich, and "workingman" becomes synonymous, with "poor man." Material progress tends to monstrous wealth on one side, and abject poverty on the other; and society is differentiated into masters and servants, rulers and ruled.

If one man were permitted to claim the land of the world as his individual property, he would be the absolute master of all humanity. All the rest of mankind could live only by his permission, and under such conditions as he chose to prescribe. So, if one man be permitted to treat as his own the land of any country, he becomes the absolute sovereign of its people. Or, if the land of a country be made the property of a class, a ruling aristocracy is created, who soon begin to regard themselves, and to be regarded, as of nobler blood and superior rights. That "God will think twice before he damns people of quality," is the natural feeling of those who are taught to believe that the land on which all must live is legitimately their private property.

The Earth-for-All Calendar: November 21 -- William Morris

"And how shall it be when these are gone? What else shall ye need when ye lack masters?  Ye shall not lack for the fields ye have tilled nor the houses ye have built nor the cloth ye have woven."

— WILLIAM MORRIS, A Dream of John Ball, Chap. IV., p. 40.  (Speech of John Ball.)

The Earth-for-All Calendar: November 20 -- Isaiah

They shall build houses and inhabit them; and they shall plant vineyards and eat the fruit of them. They shall not build and another inhabit; they shall not plant and another eat.

— Isaiah, LXV., 21-2.

Corn Belt Farmland: The Newest Real Estate Bubble? : NPR

Corn Belt Farmland: The Newest Real Estate Bubble? : NPR.

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

It's 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.

"We 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.

"This 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."

Diggle 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.

"The 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.

Physics 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.

"Farmland 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."

The 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.

"Amazingly 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."

Trupin 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.

"There's 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.

"We 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

But 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.

"You 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."

Plain 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."

Should 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.

It 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.

"I 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."

Abbie 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

The Earth-for-All Calendar: September 20 -- Wagner

See, there they troop from fields and farmyards; they've tilled the earth and turned it to a smiling garden, and fruits in plenty, enough for all who live, have paid their pains — yet poor are they and naked, starving; for not to them, or others who are needy, belongs earth's blessing, but solely to the rich and mighty one who calls men and the earth his own.

— RICHARD WAGNER, The Revolution, Prose Works, Vol. VIII, Chap. 14, p. 235.  (Translation of W. A. Ellis).

The Earth-for-All Calendar: September 16 -- Marmontel and Scott

"If we are equal and if we are brethren, make me free," he would say to you; "and as a first favor cease to rob me of the gifts which nature has provided for me."

— MARMONTEL, Address in favor of the Peasants of the North (1757), OEuvres, Vol. X., p. 84.

Breathes there the man with soul so dead
Who never to himself hath said,
        This is my own, my native land?

— SIR WALTER SCOTT, Lay of the Last Minstrel, Canto VI., I.

The Earth-for-All Calendar: September 13 -- Winstanley

That which is yet wanting on your part to be done is this, to see that the oppressor's power be cast out with his person; and to see that the free possession of the land and liberties be put into the hands of the oppressed commoners of England.

— JERRARD WINSTANLEY,  Epistle Dedicatory to Oliver Cromwell, in

The Law of Freedom in a Platform, or True Magistracy Restored.

The Earth-for-All Calendar: September 12 -- Grant Allen

"But how is it that you allow these chiefs — landlords, don't you call them? — to taboo the soil, and prevent you all from even walking on it? Don't you see that if you choose to combine in a body, and insist upon the recognition of your natural rights — if you determined to make the landlords give up their taboo, and cease from injustice, they'd have to yield to you? And then you could exercise your natural right of going where you pleased, and cultivate the land in common for the public benefit, instead of leaving it as now, to be cultivated anyhow, or turned into waste, for the benefit of the tabooers?"

— GRANT ALLEN, The British Barbarians (Words spoken by Bertram).

The Earth-for-All Calendar: August 4 -- Adam Smith

The wood of the forest, the grass of the field, and all the natural fruits of the earth, which when land was in common, cost the laborer only the trouble of gathering them, come, even to him, to have an additional price fixed upon them. He must then pay for the license to gather them, and must give up to the landlord a portion of what his labor either collects or produces. This portion, or what comes to the same thing, the price of this portion, constitutes the rent of the land.

— ADAM SMITH, The Wealth of Nations, Book I., Chap. 6.

High Rent as the Best Manure

"High rent is the best manure ever land got."

This quote is attributed to the Irish landlords, in an 1835 piece by Thomas Ainge Devyr entitled "Natural Rights: A Pamphlet for the People."

The statement bears thinking about: when private landlords collect high rents, they force their tenants to work quite hard -- keep in mind that they still have to pay taxes on various things in order to support local spending -- while the landlord has provided them NOTHING that he has made (and nothing he has bought from the fellow who made it, either).

But at the same time, it is worth considering what happens when the community collects reasonably high rents on the land, particularly urban land.  When the community collects high rent, there are no vacant lots.  There are relatively few underused lots.  There is housing for all who want it.  All this economic activity creates jobs -- for those who would design, those who would build, those who would maintain, those who would improve, those who would expand, those who would protect.  All those workers' needs and spending create more jobs.  Wages rise, as jobs chase workers.  

So the phrase is not simply an 18th century rural one, but highly relevant in 21st century U.S. cities, towns and rural areas.  When the community collects the land rent and recycles it to serve local needs -- schools, parks, well-maintained roads, public transportation systems, police, ambulance, fire protection, courts -- communities become good places to live.  When we permit private landlords (be they individual or corporate, universities or trusts) to pocket those funds -- and perhaps "invest" the excess in acquiring more land on which to pocket the rent, those good things, if they happen at all, must be financed by high taxes on productive activity.

One is a virtuous circle; the other a vicious one.  Which one is consistent with our ideals?  If Life, Liberty and the Pursuit of Happiness are for ALL of us, then I think we have to opt for the virtuous circle.

 

The Earth-for-All Calendar: June 19 -- John Stuart Mill

The greatest "burthen on land is the landlords."

— JOHN STUART MILL, Elements of Political Economy, Book II., Chap. 2, Sec. 6.

The Earth-for-All Calendar: April 29 -- Newman

Here is the fundamental error, the crude and monstrous assumption, that the land which God has given to our nation, is or can be the private property of anyone. It is a usurpation exactly similar to that of slavery.

— PROF. F. W. NEWMAN, Lectures on Political Economy (1851), Lecture VI., p. 533.

 

Goldsmith, a supplement to the "Earth for All" collection

"One only master grasps the whole domain,
And half a tillage stints thy smiling plain.

*   *   *   *   *   *

Ill fares the land to hastening ills a prey:
Where wealth accumulates and men decay:
Princes or lords may flourish or may fade;
A breath can make them as a breath has made;
But a bold peasantry, their country's pride,
When once destroy'd can never be supply'd.

*   *   *   *   *   *

A time there was ere England's griefs began;
When every rood of ground maintained its man;
But times are alter'd, trade's unfeeling train
Usurp the land, and dispossess the swain."

Goldsmith: The Deserted Village

Other excerpts from this poem appear in Crosby's Calendar, but this one does not.  I hereby add it!

The Earth-for-All Calendar: March 9 -- Spence

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.

The Earth-for-All Calendar: March 8 - Emerson

"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 ...

The Land Questions: #32: Crop subsidies

32.  Who should get crop subsidies in America?

A. Landlords of land that is rented to tenant farmers

B. Landlords of land that is not farmed

C. Tenant farmers

D. Big farmers who own their land

E. Absentee farm landlords, but only if they are Americans

F. Absentee farm landlords, but only if they are retired farmers or their widows

G. Absentee farm landlords, but only if their total land holdings are under $500,000 (about 1000 acres in most places).

H. Your suggestions?

Earnings and findings -- earned and unearned income

Does the Single Tax discriminate between earned and unearned income?

It is the scientific way of doing what we have been feebly attempting to do in an unscientific way, that is, to distinguish between what Dr. Scott Nearing called "property income" and "services income," or between that form of wealth which is the result of individual effort in production and that which is purely the result of the collective effort of society; or between the two forms of wealth which Dr. Ellwood, of the University of Missouri, in a seemingly unwilling recognition of an unwelcome truth, calls "earnings" and "findings."

In the case of the great majority of us (whether as individuals or as partners in corporations) our incomes are so inextricably compounded of earnings and findings, of privilege income and service income, that it is hard for some of us to know whether we belong to the privileged or unprivileged classes, to the slave owners or the slaves, to the confiscators or the victims; and perhaps only those absolutely property less men at the bottom of the social scale can be said to have no share in the "findings" that spring from privilege. On the other hand it is equally true that all industry up to its highest strata, has to pay toll to privilege and provide those "findings" which distribute themselves with more or less inequality over almost the whole of society. How to distinguish between and separate these entirely different kinds of wealth is what all sincere sociologists and honest taxation commissioners have wanted to do and have hitherto failed in the doing.

If we take a handful of sand and a handful of iron filings and mix them thoroughly, and then set a man with the sharpest eyesight and the nimblest fingers to separate the particles, it will take him long to accomplish his task and he will never do it with more than an approximation to completeness. But apply a strong magnet to the mixture and the separation will be accomplished in ten minutes. Then see how the analogy applies to the economic problem in society. Let us imagine the return that should naturally flow to land in the form of rent to take the shape of blue coins made of steel. Let us fancy that the natural reward that goes to capital as interest takes the form of red coins made of wood. Finally let us figure the natural return to human service of all grades as being represented by white coins also made of wood. On examination it will be discovered that in the case of almost every member of society above the rank of the day laborer, his income is tri-colored or composed of all three coins. There are countless "captains of industry" among us who complacently assume their large incomes to be the rewards freely given by a free world in return for their invaluable services, who will be surprised to find how large a proportion of blue their income coins contain. There are multitudes of livers upon what they have called "interest" who will expect to find their coins red, who will be equally surprised to discover that they are almost entirely blue. To complete the parable, the taxation of land values will be like the application of the magnet which will draw away the blue steel coins in whatever stratum of society they may be found, and lay them aside for social purposes, being socially created wealth; leaving the red and white coins to be competed for in a world of free opportunity, without deduction or diminution by taxation or in any other way.

From The Single Tax Year Book (1917)

Another motto: Save the Rent for Society

Save the rent for Society.

That's short and sweet.  I came across it in The Single Tax Year Book for 1917, in a chapter about the Single Tax in Germany.

Downton Abbey: The Landed Gentry

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.)

The Land Questions: #14 -- Personal Economic Security

14. A man wants to provide for his family in case something happens to him.  What should he do?

A. Buy them some slaves

B. Buy them some real estate

C. Buy them some land, particularly where taxpayer-financed infrastructure is about to be added

D. Buy them stocks

E. Buy life insurance

F. Buy them slaves and land

G. Your suggestions?

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

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

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

WHO ARE THE CRIMINALS?

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

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

I.    WHO ARE THE CRIMINALS?

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

II. FRENCH ARISTOCRACY OF PRIVILEGE.

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

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

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

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

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

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

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


III. NEW YORK ARISTOCRACY OF PRIVILEGE.

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

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

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


IV. ROBBERY OF MASSES BY CLASSES.

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

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

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


V. NATURE AND EXTENT OF ROBBERIES.

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

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

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

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

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

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


VI.   HOW TO STOP THE ROBBERIES.

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

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

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

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

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

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

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

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

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

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

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


VII.   THE CRIMINALS.

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

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

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

The Population-Value of Natural Resources

I like that expression!

It comes from a 1914 report of a Washington State taxation symposium, in a section about taxing forests.  Here's a section of it, a comment from someone representing the state Grange:

Mr. Kegley of the state grange requested me to express to this conference as the representative of the grange the purport of the resolution that we have been adopting for the past five years, and with the permission of the chairman I will do so. He cautioned me particularly not to "let them put anything over on us," and I will try not to do so. Our particular grievance lies against the speculators. We have adopted resolutions for the past five years at every session of the state grange, county granges, and by a great many subordinates, for the reform of our system of revenue so as to abolish speculation in land. When I was a small boy I purchased a pig. It spent most of its time rubbing itself against the pen, but did not seem to grow. Finally I asked my father what was the trouble. He teased me for awhile and then stated, using big words, that it was "supporting too many parasites." I asked him what a parasite was, and he said, "Your pig is lousy." The speculator is a louse on the body politic. He is absolutely useless, a mere parasite. He takes what does not belong to him. We farmers clear up our land and more than half the values we create goes to speculators. That ought to stop. We ought to collect from the speculator all that he gets that he does not earn. There ought to be taken from the speculator a special economic rent, not a tax, not a burden upon industry, not a burden on anything he is doing except his stealing.

We believe that the speculator ought to be relieved of that which he has unjustly acquired, to which he has no more right than the slave-holder or pirate to his ill-gotten wealth. These are strong terms, but it is the language of the grange. They have adopted resolutions again and again, unanimously and with great enthusiasm, and we submit that the principal thing this conference can do is to so reform our system of taxation, of public revenue, as to prevent the speculator getting a single dollar he has not earned.

Just a word considering what the speculator is doing in the community. If I went over on the other side of the mountains and dug a ditch, and a man should take water from that ditch, say half of it, he would be stealing. Yet every farmer who goes out on the stump land on the West coast, cultivates a farm and opens it up, has most of his value stolen from him by speculators — absolutely stolen. If a man were to come to my farm and drive off half my stock he would not be robbing me of a bit more, directly or morally, of what I had created, than he does when he takes the value I have created by clearing my farm. An Italian went to Bellingham and bought a lot from a speculator in the suburbs for $200. After awhile he thought he wanted to buy another lot, and tried to buy it for $200 — a lot next to the one he had already bought. But the speculator said, "No, you have added $100 to the lot adjoining your house." He did not get that $100. The speculator stole it. It is absolute stealing. Now we go further than that; we say the special curse of our whole system of taxation is the speculator. If we take from the speculator anything like what he is stealing from us we would not need any taxes. We could absolutely abolish all taxes and have a vast fund left over for a dividend to every stockholder.

Our timber is increasing tremendously. Our fisheries are increasing. The value of land on Second Avenue has increased, not because of what has been done by the owner, but because there are something like 80,000 people more in Seattle now than there were 10 years ago. The people that come in create but don't get that value. The speculator gets it all. The speculator is the sole cause of unemployment. Every man who wishes to control any natural resource should be made to pay to the public an annual rent of 4% or 5%, whatever is right, on the population value of the natural resources he is controlling, and we would have in this state more than $100,000,000 a year over and above our expenses, and that is a very conservative estimate. Timber increased in the State of Minnesota in 8 years more than $7 per thousand. You and I have built the Panama Canal by the increase in the price of sugar, $1.50 a sack, a few dollars on a suit of clothes, 50 cents to a dollar on a pair of shoes. The Panama Canal will add to the price of the billions of feet of timber in this state perhaps a dollar or two dollars per thousand, how much nobody knows yet, but something. Who is going to get that? If any man living thinks the timber barons are going to get that he is badly fooled. The state grange, the state federation of labor, and other organizations in this state propose to collect for the people every dollar of population-made value, or a fair rental on the values which our people have added to these natural resources, giving to the timber men merely what they have created, but keeping for the people all the values they have created. We propose to give the individually-made value to the individual who creates it. That is all we claim, all that we want. It is considerable to be sure, but it is all that we want. We want that every individual should have all that he creates, absolutely free of taxes. That is the position of the grange, asserted again and again in resolutions as clear as language can be made, to give to each individual all that he creates; to abolish all penalizing fines upon any industry and not fine a man for doing what he ought to do, what we want him to do. Up in Whatcom County every man who keeps a cow is fined 60 cents a year. If he keeps a good horse he is fined $8 a year. If he paints his house or takes out a stump he is taxed (fined). In the state in which I was born and raised, they paid a man for planting trees; but here we tax a man who blows out a stump. We should fine the man who keeps the stump in, and reward the man who takes it out. We want to tax the stump and exempt the cow. That, we think, is the only system. As representative of the grange I will have to make my report to the grange — they want to know what the attitude of every speaker is and what he thinks concerning the speculators. I think we of the grange do not care a continental about anything else. Are you going to help us to rid ourselves of the parasites (the speculators), or are you not? Are you going to help us to free ourselves from the men who are robbing as of the values we create, or are you going to fool away your time in a sham fight in putting upon property a lying tax which ultimately will fall upon the farmer and the wage-worker?

Pretty well covers it.

Great fortunes and the rest of us

We have no disposition to say anything about Andrew Carnegie's munificent benefactions. On the one hand there is nothing in this philanthropic spree of a modern Dives to call for commendation; and on the other, the expenditure by any man of what society concedes to be his own fortune, is a private matter outside the pale of criticism.

It is only when the question of how a millionaire ought to use his wealth is brought forward in connection with these charitable performances that the subject becomes one of public concern. Then it is of public concern only to the extent of justifying the retort that it is nobody's business but his own how any millionaire uses his wealth, provided he does not use it prejudicially to the rights of others.

The vital question is not how millionaires use their wealth, but how they get it. Not how they did get it, for what has happened has happened, and by-gones should be by-gones; but how they are getting it now.

Have they a hoard of goods formerly accumulated, from which they draw? Then their getting it hurts nobody.

Do they earn it as they go along? Then their getting it benefits everybody.

Or do they merely possess legal authority to levy continually upon the common earnings for their own enrichment? Then their getting it is a present and continuing wrong, which is of incalculable public concern.

-- From "The Public," March 23, 1901

 

One might be led to ask whether the FIRE sector is levying upon the earnings of the larger community a toll they don't actually rightly earn.

Khosla, Sun Co-Founder, Uses Capitalism to Help Poor

Khosla, Sun Co-Founder, Uses Capitalism to Help Poor - NYTimes.com.

MUMBAI, India — Vinod Khosla, the billionaire venture capitalist and co-founder of Sun Microsystems, was already among the world’s richest men when he invested a few years ago in SKS Microfinance, a lender to poor women in India.

But the roaring success of SKS’s recent initial public stock offering in Mumbai has made him richer by about $117 million — money he says he plans to plow back into other ventures that aim to fight poverty while also trying to turn a profit.

Now let's do a thought exercise.  Let's say that the microcredit projects are extremely successful, leading to abundant economic activity for thousands, hundreds of thousands, even millions, of women and their families. 

Among the effects of that increase in economic activity will be an increase in the value of land in the places where that activity is taking place.  That means that those who own land will be able to charge those who do not own land more for access to it.  If the recipients of microcredit are already landholders, they will benefit as rents rise in their community.  If the recipients of microcredit are not yet landholders, they will find themselves paying more rent to those who are.   The tenants become sharecroppers, sharing their product with a landholder who provided no value added.  Landed gentry.

Q.  So how do we make microcredit's benefits accrue to the community as a whole, rather than simply to the landholders?

A.  We encourage nations and communities to place more -- even all -- of their revenue collection onto the value of land and of natural resources, rather than permitting that value to accrue to those who claim title to the best land

Socialize that value -- treat it as the common treasure of the entire local community, rather than as the private windfall-collector of any individual or group.  Collect that rent, rather than letting it accrue to the benefit of an individual.  Use it to build schools, to dig wells, to clean water, to fund public services.

That is how to help whole communities.  That is how we can end poverty.

Microcredit alone will make winners out of a fortunate few.  But it won't improve life for the community, or create opportunities for the next generation.  Collecting the increase in land value that the increase in economic activity creates WILL.

Does this take anything that the borrower created, either by their efforts or their risk-taking?  No.  They get to keep that.

The Woodpeckers' Tree System

The Woodpeckers' Tree System

The Woodpeckers were advancing in civilization and took up something like the English land system.  It was shown that holes in a tree trunk were fixed improvements which could not be made unless ownership of the tree was secure.  Full title to the trees was, therefore, confirmed to various Woodpeckers.

Thereupon the more active and long-headed Woodpeckers began to affix to each vacant tree a little red leaf like a seal, so as "to hold it until is is wanted."

The Woodpeckers increased in number so that there were not unclaimed trees enough for everybody; later all the convenient trees were full, and there were still more applications.

Wealth concentration in China exceeds US

Global Times - Wealth concentration in China exceeds US. In the US, the wealthiest 5 percent people hold 60 percent of the wealth of the country, but the middle-class families enjoy the largest part of the incomes.

Let's see what the data says.  My source is the 2007 Survey of Consumer Finances, from the Federal Reserve Board.   One can look at it a number of different ways.  Here are two.

1. The top 1% of wealthholders have 33.8% of the Net Worth; the top 5% hold 60.4% of the NW.  The next 45% hold 37.1% of the NW.   The top 1% of wealthholders have 16.4% of the income; the top 5% have 33.0% of the income.  The next 45% have 44.6% of the income.    If the 50th to 95th percentiles of the wealth distribution constitute America's middle class, the article's statement is true.   Source: http://lvtfan.typepad.com/lvtfans_blog/2010/04/americas-wealth-distribution-2007-wealth-concentration-part-1-of-3.html

2. The top 10% of income recipients get 59.4% of the income.  The top 20% of income recipients get 70.3% of the income.  The 40th to 80th income percentiles receive 21.0% of the income; the 40th to 90th receive 31.9% of the income.  Source: http://lvtfan.typepad.com/lvtfans_blog/2010/04/americas-wealth-distribution-2007-wealth-concentration-part-2-of-3.html, Table 3.

Are some of those top 10% income folks part of our "middle class?"

How would you advocate viewing the data, and what conclusion would you reach?

The Landlord's Prayer -- Archer's version

THE LANDLORD'S PRAYER OFFERING IN THE TEMPLE

O God, I thank Thee that I am not as other men. Thou art very wonderful and very kind — for Thou hast made me Thine own selected one!

All Thy works praise Thee — and yield their tribute to me! The earth, created Thou it — and gavest it to me!

The sea also is Thine, but Thou hast given me its bed for a long distance out from the shore — so that none may ride upon its waters without paying toll to me.

The firmament of the Heavens is Thine, and Thou hast set the sun therein to give light and warmth by day, likewise the moon and the stars whereby to radiate through the gloom and the darkness of the night, and these also enrich my exchequer.

Thou ridest Thy chariots in the clouds and causeth the winds to blow, and dost thereby still further increase my plenteousness.

Thou hast decreed that the non-elect of mankind shall live by labour, and hast conferred on me the power to make them hand over annual tribute to me and mine for the opportunity of so doing.

Thou hast ordained that the earth which Thou gavest me shall rise in value through the operation of natural laws and social factors, and hast appointed me to collect these enhanced values and to use them for myself and my house.

In further manifestation of Thy concern for me and mine, Thou hast commanded that the non-elect shall forge weapons for defending that which Thou hast given to me; that they — the non-elect — shall provide forces to use these weapons on my behalf, that they shall pay the capital costs thereof, and that they shall further provide out of their own common labors such funds as may be needed for feeding and clothing themselves and their dependents, and of providing compensation for the dependents of those who fall or are maimed and bruised whilst engaged in safeguarding Thy gifts to myself, in order that no toll shall be made upon Thy goodness to my house. Yea, Lord, I thank Thee that I am Thine own elect, and that Thy wonderful goodness is made plain in the tribute which Thy created handiwork brings to me and to my house. Amen, Amen, and yet again Amen.

—john Archer

This version was printed in Land and Freedom in 1917.

In another version, the final paragraphs read slightly differently:

William Allan's Landlord's Prayer

I've found a longer version of a Landlord's Prayer which Henry George published in The Standard (late 1880s, or early 1890s).  This one was reprinted in December, 1920 in an IBEW publication, and is sourced there to the Dundee People's Journal.

LANDLORD'S PRAYER.
(By William Allan.)
Lord, keep us rich and free from toil
For we
Are honored holders of thy soil,
Which democrats would fain despoil
With glee.
O Lord, our fathers got the land
For serving men whom Thy right hand
Had chosen to be great and grand,
As kings.
Tho' taken by stealth, we're not to blame;
Thou knowest, O Lord! it is a shame
To say to us of titled name
Such things.

Lord, let us live in wealth's content
And peace;
Lord, we are by Thy mercy meant
To rule mankind and make our rent
Increase.
The birds that hunt the moors and hills,
The fish that swim in streams and rills,
The beasts that roam as nature wills,
We own.
E'en Lord, the minerals that lie
Beneath the earth's periphery
Belong to us -- Thou knowest why
Alone.

Lord, on the rugged rabble frown,
For they
Are foes to us, Thy church and crown;
Lord, bare Thine arm and grind them
down
To clay.
O Lord, our God! we make their laws,
Which they reject with wild applause;
Be Thou a buckler to our cause
And caste.
They scorn our love, Thy name and word,
They reverence neither squire nor lord;
Lord, them consume with fire and sword
At last.

Lord, they are poor and ignorant,
And worse.
Compared with us, how different
In manner, garb, and lineament,
And purse!
Lord, never let them get or see
The power which lies in unity.
Keep us apart from them -- for we
Are men.
Protect us from their greedy hands,
Protect us from their vile demands,
Protect us in our wealth and lands,
Amen, amen!

--Dundee People's Journal.

The Labour Problem ... population? or something else?

Here's another interesting article from the January 1, 1887 edition of The Democrat.  It speaks to some very 21st-century issues: wealth concentration, population growth, access and ownership of land and natural resources, and equality of opportunity -- to name a few.  I've Americanized the spellings to make it an easier read for US readers.   "Labor" refers to us, ordinary folks who need to work for a living -- not to organized labor specifically.

THE LABOR PROBLEM.

By An American.

The signs of dissatisfaction on the part of the laboring classes are clearly apparent everywhere. Labor organizations, strikes, boycotts, labor journals -- all these mean something, and what that something is we cannot find out too soon.

Is the dissatisfaction of labor simply the result of human perverseness, the envy and jealousy of idleness and carelessness at the better success of industry and thrift, or are there unjust forces operating on society producing vicious inequalities?

Has every man the same chance? Can all men attain to the same fortune if all are equally industrious and thrifty? Is there a fair field and no favor?

Certainly there is, cries a host of respondents. Is not each man the architect of his own fortune? And they quote case after case of men who began at the foot of the ladder, but who with indomitable pluck gained step after step until they conquered fortune, while others who began at the same point, neglected their opportunities and are still toiling in poverty, where they are destined to stay to the end of the chapter.

Is society so constructed that to all there is the same chance? Can all by exercising the same industry and thrift become equally wealthy? This question goes directly to the core of the labor problem. If there is the same chance to all, then what reason has the laborer to complain? A little consideration answers this question.

In how many years could society with its utmost exertions and greatest economy accumulate enough so that toil would be no longer necessary, and forever after all succeeding generations could live in idleness. No more plowing in spring, no reaping in harvest, no toiling in the mine, no sailing on the ocean — a huge, everlasting pic-nic!

Never! Toil, to restore the faded or to replace the worn out, must be as lasting as the race. Toil, toil, toil, is the inevitable.

"Men may come and men may go,
But toil goes on for ever."

Note that as fact number one and put fact number two alongside it.

And fact number two is this: Certain families now have the power of living for ever without toil. They organize no industry, invent no machine, do nothing to furnish supplies for themselves or their fellows — drones in the human hive, and yet their cruse of oil never fails.

Now, put these two facts together:

1st. Toil must be lasting as the race;

2nd. Some are now eternally exempt from toil;

Therefore, as certain as any therefore can be, some are endowed with privileges from which the rest of the race must be by an inexorable physical law for ever excluded.

Crosby: God's Gift (a poem)

I came across a poem I thought worth sharing.  It comes from a book of poetry entitled "Broadcast", by Ernest Howard Crosby.

God's Gift

WHERE is my gift," said God, "that I gave to men—
The sun-wed, fruitful earth, with her freight of good
For all their wants? What mean these prayers for food?
Are there poor in a world which bursts with its golden stores?
Who are the few that dare to withhold from all My gift to all of the fruitful, sun-wed earth?"

And the few replied: "O, Lord, we give Thee thanks.
Thou gavest the earth to all, it is true, but lo!
Thy angels, Law and Order, who rule the world
When Thou art far away, have learned our worth,
And rightly bestowed on us Thine inheritance."

"I know them not," said God; "they are fiends from hell
That juggle thus with the gift that I gave to man.
I am never far away from the world I gave.
And now once more and forevermore I give
This fruitful earth anew to the sons of men.
Woe to the fiends who shall dare usurp my place!
Woe to the few who say that my gift is theirs!
Woe to the man who grasps his neighbour's land!"

It brings to mind several things I've read.  First, this passage from "Progress and Poverty" by Henry George:

We sail through space as if on a well-provisioned ship. If food above deck seems to grow scarce, we simply open a hatch -- and there is a new supply. And a very great command over others comes to those who, as the hatches are opened, are permitted to say: "This is mine!"

Second, two different versions of "The Landlord's Prayer" which I posted on this blog earlier:

from the Anglican Book of Common Prayer

A Prayer For Landlords

"The earth is thine, O Lord, and all that is contained therein; notwithstanding thou hast given the possession thereof to the children of men, to pass over the time of their short pilgrimage in this vale of misery.  We heartily pray thee to send thy holy spirit into the hearts of those that possess the grounds, pastures and dwelling places of the earth, that they, remembering themselves to be thy tenants, may not rack or stretch out the rents of their houses or lands; not yet take unreasonable fines and incomes, after the manner of covetous worldlings; but, so let them out to others that the inhabitants thereof may be able both to pay  their rents, and also honestly to live, to nourish their family and to relieve the poor.  Give them grace also to consider that they are but strangers and pilgrims in this world, having here no dwelling-place, but seeking one to come; that they, remembering the short continuance of their lives, may be content with what is sufficient, and not join house to house, nor couple land to land, to the impoverishment of others; but so behave themselves in letting out their tenements, lands and pastures, that after this life they may be received into everlasting dwelling-places, through Jesus Christ our Lord."

and from Henry George's newspaper, The Standard:

Lord, keep us rich and free from toil,
For we
Are honored holders of Thy soil,
Which democrats would now despoil
With glee.
O! Lord, our fathers got the land
For serving those whom Thy right hand
Had chosen to be great and grand
As kings.
Tho' ta'en by force, we're not to blame,
Thou know'st, O! Lord, it is a shame
To say to us - of titled name,
Such things.

Lord, let us live in wealth's content,
And peace!
Lord, we are by Thy mercy meant
To rule mankind, and make our rent
Increase.
The birds that haunt the moors and hills,
The fish that swim in streams and rills,
The beasts that roam as Nature wills,
We own;
E'en Lord, the minerals that lie
Beneath the earth's periphery
Belong to us! Thou knowest why

Alone.

And third, of a book entitled "Thy Neighbor's Landmark" which is online at http://www.whatwouldjesustax.com.

Crosby's poem is wonderful.   Perhaps we can explain a significant portion of the concentrations of wealth and income in the hands of a few:

And the few replied: "O, Lord, we give Thee thanks.
Thou gavest the earth to all, it is true, but lo!
Thy angels, Law and Order, who rule the world
When Thou art far away, have learned our worth,
And rightly bestowed on us Thine inheritance."

"I know them not," said God; "they are fiends from hell
That juggle thus with the gift that I gave to man.

Mine! All Mine!

When I started reading this piece, from The Single Tax Review of 1914, I thought it was going to be a retelling of The Savannah, one of many memorable passages in Henry George's book, Progress and Poverty.  But it turned out to be something a little different, and struck me as very topical nearly 100 years later, as we see joblessness and tremendous concentration of wealth in America, this "smartest" of countries, with supposedly expert economists trying to steer us back into something resembling prosperity.  Wages tending to a minimum, and jobs disappearing.  Individuals and large shareholders in companies who claim ownership of our best land and our natural resources growing rich, while the rest of us struggle to sip from the trickle-down we are told will be ours if we consent to this structure.   Those who have read P&P know why the flow is in the other direction.

IT'S MINE—ALL MINE.

(For the Review.)

By BENJAMIN F. LINDAS.

The sun had just slipped behind a few wisps of clouds that hung above the western horizon, as a 'prairie schooner' came to a stop in the fertile bottom lands on the banks of a mighty river of the mid-west. A few trees growing in scattered clusters were all that broke the monotony of the plains that stretched in every direction as far as eye could see. The only vegetation was a high, thick, tangled grass that grew in luxuriant abundance from the rich black soil.

"Guess we had better stop here," said the driver, a harsh-voiced squatty man of middle age, whose shifty gray eyes peered out from under his heavy brows. "Soil looks good—no pestering neighbors," and he tugged at the heavy mustache that hid his tightly pressed lips.

"All right," was the tired response from his wife, who was slightly younger than her husband, with traces of beauty still visible in the clear-cut profile and large, dark, but now lusterless eyes. "But it's dreadfully lonesome, Jim."

The man was busy unhitching the horses and made no response. He was a man of few words; morose, hot-tempered and selfish. He had, by the strictest kind of economy and frugality hoarded together a few hundred dollars, and, ignorant though he was, he had left the little village in which he had been reared in answer to an inner voice that kept prompting him to "Get some land! Get some land!"

Land in Manhattan

One Broadway deal - NYPOST.com.

I don't know quite when it occurred, but I am intrigued to see that the sale of a piece of land is no longer described in dollars per acre, or dollars per square foot of land, but rather in dollars per square foot of permitted development.  This item is about a lot at the corner of 56th and Lex in midtown Manhattan.  The lot size isn't even mentioned.

The article mentions that it includes seven vacant small buildings!  Imagine!  Vacant buildings in midtown Manhattan!  Not even so-called "taxpayers."

The Turkey-based Kiska Development has bought the development site at the northwest corner of 56th Street and Lexington Avenue for $33.9 million, or $386 a square foot.

The lot can accommodate 88,000 square feet of development, and while the expectations are that the space will hold a hotel, its flexible zoning means it could host offices, retail or residential. Kiska, which is led by Kagan Gursel, created the Marmara-Manhattan extended stay hotel on East 94th Street, which was converted from a condominium. Gursel runs Marmara out of Istanbul. The site encompasses seven vacant small buildings and runs from 678, 680, 682 and 684 Lexington Avenue around the corner to 131, 122 and 135 East 56th Street.

What sort of incentives do we have in place if this many buildings can sit vacant?   The assessor must be valuing them at some token value, rather than at their genuine land value.  The existing buildings may be worth nothing -- but the land clearly has value.    Setting things up so that owners can afford to let that land sit unused is dumb!   A property worth $33.9 million, as a teardown, should be paying something approaching 5% of that amount in land taxes per year.  That would be $1.7 million in taxes.  If we only collect 4%, and leave the other 1% as a bonus for the landholder, that would still be $1.36 million -- far better than collecting that same amount in sales taxes or wage taxes.

NYC may have its reasons for not collecting the rental value of its land.  Maybe it has plenty of revenue already to meet all its needs.  But the federal government and even NYS could use that revenue, and ought to be collecting it if NYC chooses not to.

I wonder what the sellers would tell us they did to earn their $33.9 million.  When did they buy these sites, and how much did they pay?  How much have they earned in rents on them since then?  And what did they do to produce the increase in value in the intervening time?  (How many people have they housed?  How many jobs have been made within those walls within their ownership?) 

Some people work very hard to earn a living (at $50,000 a year, $33.9 million represents 678 years of work).  Others leverage a small down payment and a few years of mortgage payments, and walk away with a significant gain, taxed as a "capital" gain, at a lower rate than the wages of those who work for a living.

How Is The Distribution Of Wealth Determined In The United States?

One of my standing google alerts brought me to a page where this question was posed.  I jumped in to answer it, and thought I'd share my answer here:

Answer #1: It is determined by what we tax and what we don't; what we permit to be privatized, and what we socialize.  When we permit the privatization of natural resources and the economic value of land, by collecting only small royalties and low taxes on land value, we permit individuals and corporate shareholders to privatize value which all of us create.  Corporate stock ownership is quite concentrated, even though lots of people own a little each.

When we place taxes on buildings, and the sales of goods and sometimes services, we tax that which individuals and corporations create.  Many would argue that this is unfair, and most economists would agree that we discourage production, innovation and job creation.

When we place taxes on wages, we socialize a part of that which individuals create.  At the very highest income levels, where a significant portion of "wages" might actually be natural resource values, or urban land rent, or other kinds of privilege, we are -- somewhat clumsily -- collecting via an income tax that which ought to have been collected via taxes on land values and natural resource values.  But it is a clumsy tool.

When we tax the very largest estates (we currently tax the estates of fewer than 1% of the people who die each year), we are collecting, once per generation, a percentage of the appreciation of land and natural resources (which hasn't been taxed yet)  -- which is better than never collecting it at all but far inferior to collecting it annually --  but we are also collecting some things which are genuinely the fruits of someone's labor or brilliance.

Huge fortunes may be built on good ideas, but frequently they are built on urban land values, on natural resources (Jed Clampett) -- or on privilege or monopoly of some kind.  "Capital" doesn't appreciate.  As every homeowner knows, buildings depreciate, even with good maintenance.  As every car owner knows, cars and other machinery depreciate, even with good maintenance.  What appreciates is what is scarce or in finite supply: choice urban lots and nonrenewable natural resources that meet a consumer need.  When we permit some of us to say "THIS IS MINE!"  we determine wealth distribution.  The rest of us pay the privileged folks for that upon which we rely to live.   What a deal!  Every young person must either pay rent or buy a piece of land on which to live, and much of our housing payment is for the location, not the structure; and on top of that we must pay interest.  (Guess who benefits? Shareholders of lenders.)

You might be interested in the fact that the board game Monopoly is based on a game which was developed in the early 1900s to teach these ideas.  It was called The Landlord's Game, and it came with two sets of rules.  One set was called the Prosperity rules, and it made for a rather dull game: no big winners, no abject losers.  Not an exciting game, but a model for sustainable living, in which all could prosper.  Needless to say, the board game Monopoly is based on the other set of rules.

Should life be based on Monopoly rules, or Prosperity rules?

Answer #2: If your question was "how do we measure the distribution of wealth" then perhaps the best answer is via the Federal Reserve Board's triennial Survey of Consumer Finances, last conducted in 2007.  They survey households in great detail, and then report how wealth in total and of various kinds, and debt, are distributed.  However, since their sample omits the Fortune 400, they under-report the concentration of wealth.   See http://lvtfan.typepad.com/lvtfans_blog/2010/02/the-house-of-tranquillity-a-middle-class-agenda.html for a bit about wealth concentration, and look on that same page for more about the Survey of Consumer Finances (SCF). 

Debt in America

A new study on the Federal Reserve Board site provides some interesting data from several years' worth of Survey of Consumer Finances data.  The data is not new, but it is stark, and worth paying attention to.  The study is a working paper entitled The Finances of American Households in the Past Three Recessions: Evidence from the Survey of Consumer Finances.

While the working paper is focused on modeling what has happened to various parts of our population since the 2007 SCF (this is not an analysis of the return to the 2007 panelists in 2009, which will be out later in the year), what I'm presenting here is actual SCF data.  It comes from Tables 5 and 7.

		1989	2001	2007
All households
	1. Percent of households holding debt:	72%	75%	77%
	2. Percent of households holding mortgage debt:	40%	45%	49%
	3. Median ratio of debt to income:	0.5	0.8	1.1
	4. Percent of HH with debt payments >40% of income	10%	12%	15%
Households by Income Percentile:
	1. Percent of households holding debt:
	Bottom 40%	53%	60%	61%
	Next 40%	82	84	87
	Top 20%	91	88	89
2. Percent of households holding mortgage debt:
	Bottom 40%	16%	20%	22%
	Next 40%	47	53	60
	Top 20%	72	76	79
3. Median ratio of debt to income:
	Bottom 40%	0.3	0.5	0.7
	Next 40%	0.6	0.9	1.4
	Top 20%	0.6	0.9	1.2
4. Debt payments >40% of income
	Bottom 40%	19%	22%	23%
	Next 40%	8	9	14
	Top 20%	3	3	6
Age of Head:
1. Percent of households holding debt:
	<45 years	84%	86%	85%
	45 to 64 years	78	81	85
	>64 years	38	43	48
2. Percent of households holding mortgage debt:
	<45 years	45%	48%	48%
	45 to 64 years	48	56	61
	>64 years	15	21	28
3. Median ratio of debt to income:
	<45 years	0.6	0.9	1.3
	45 to 64 years	0.5	0.8	1.1
	>64 years	0.2	0.4	0.7
4. Debt payments >40% of income
	<45 years	10%	11%	14%
	45 to 64 years	10	12	15
	>64 years	9	15	15

Do you notice the trend?  An increasing proportion of us are helping to make the FIRE sector --  the shareholders in the finance, insurance and real estate businesses -- wealthy. 

Nearly half of retirees have debt, up 1/3 from 1989, and median debt has n tripled.  Nearly 3 in 10 retirees have mortgages, and 15% of retirees (or is that of the retirees with debt?) have over 40% of their income devoted to debt payments.

Among our young people -- <45 years of age, 85% have debt, and at the median, their debt is 1.3 times their income, more than double the ratio 18 years earlier. 

A wealth concentrating machine.  The FIRE sector -- the banks, the insurance companies, the real estate interests -- are have been permitted to create a giant wealth machine, too big to fail.

But not too big to correct.  There ARE things that can be done.  I encourage you to take a look at Mason Gaffney's new book, After the Crash: Designing a Depression Free Economy.  (read the interview linked at http://www.masongaffney.org/, or find the book at schalkenbach.org's bookstore.

America's millionaires

The term "millionaire" used to always be a reference to net worth.  Recently, we've started to see it used to refer to people with annual incomes of $1 million or more -- usually in articles suggesting that a significant and growing percentage of us fall into that category and isn't America wonderful?

Here is a bit of information which uses the traditional definition: people with net worth of more than $1 million.  It comes from a study entitled "Migration of Wealth in New Jersey and the Impact on Wealth and Philanthropy."  The data cited comes from the Federal Reserve Board's triennial Survey of Consumer Finances.

In 2007, according to the Federal Reserve Data, only 9% of U.S. households had at least $1 million in net worth. That 9% made the majority of charitable contributions, owned the majority of equity in unincorporated and closely held businesses, and had a disproportionately large share of investable assets as compared with the remaining 91% of the population. These “wealthy households” made 53% of all household charitable contributions ($117 billion). They also owned 93% ($13.7 trillion) of business equity owned by all households in unincorporated and closely held businesses, and they had 41% ($10.3 trillion) of investable assets owned by all households, i.e. liquid assets, stocks, bonds, and mutual funds. Typically, wealthy households do not have million dollar incomes. In 2006, the average wealthy household income before tax amounted to $354 thousand, while the median amounted to $159 thousand. Only 6% of millionaire households made as much as $1 million in 2007. The pattern is similar for unearned income. The average household unearned income of millionaire households was $145 thousand in 2006 and the median was $18 thousand. Only 6% of wealthy households had unearned income of as much as $500 thousand. Nevertheless, wealthy households received 86% of total unearned income received by all households in 2006.

Among wealthy households, both household income and household assets are importantly related to charitable giving, but assets, especially investable assets, are much more important than income. Statistically, the relationship between the value of assets and the amount of charitable giving is roughly 7 times stronger than the relationship between the level of income and the amount of charitable contributions. Put simply, millionaire households make charitable contributions more because they are wealthy than because they earn a high income.

Most (more than 90%) millionaires acquired their wealth in their own lifetimes through business, investment, or service as corporate executives rather than through inheritance. The majority became wealthy through growing their own business or investing in businesses of others. They tend to be entrepreneurial and agents of economic expansion. In earlier paragraphs we saw that as a group they own 93% of the equity in unincorporated and closely held businesses owned by all households in the U.S. Even in retirement millionaires participate in business opportunities. They contribute to local economic development as a source of funds, as a potential investor, and as an agent for creating new businesses and expanding established ones.

This seems to be a paean to trickle-down economics, and even those of us who don't believe in trickle-down economics can be tempted to accept that, since our wealthiest fellow citizens have such a large fraction of the total net worth, trickle-down must be the only relevant model for understanding wealth.  

I question the realities behind the statement that "Most (more than 90%) millionaires acquired their wealth in their own lifetimes through business, investment, or service as corporate executives rather than through inheritance."  

• Many of them, I suspect, were given college educations by their parents or grandparents; a private college education today costs about $200,000.  Not an insubstantial figure.  Graduate school runs about the same amount, particularly in the private universities or for out-of-state students at public universities.  
• Many of them, I suspect, were given the 20% down payment on a home either by the government or by their parents or other relatives.  It might have been 20% of $80,000 or $125,000, which might sound trivial in relation to their 2007 $1,000,000 corpus -- but it made a big difference which the paragraph above fails to acknowledge. (Paying off the other 80% made a relatively small contribution to their "home equity.") The appreciation of the land under that home may be a major contributor to their net worth. 

We may call that "investment" but it is really the legalized privatization of that which one's community and one's local, state and federal governments' spending has created.  Self made men?   Hmph!  And the startup funds for their businesses may have come from borrowing on that land equity.  -- and of course that interest is deductible on one's federal and, likely, state income taxes.  A nice subsidy, huh?  And the most profitable businesses tend to be those who own the building and land on which the business is conducted -- and the sites of others' businesses too!   Those folks may work hard -- almost as hard as their employees -- but they also get the benefit of the local economic activity as it drives the selling and rental value of their landholdings upward.  Bu we permit them to call themselves self-made.  Aren't we generous?   Or would it be more accurate to say that we're wearing blinders?

We should set the playing field level between landlord businesses and tenant businesses. (Land value taxation would do this.)  Landlords do not create land!  To permit structures which compensate them as if they do is dumb.

A bit later, the study continues,

According to the Survey of Consumer Finances, sponsored by the Board of Governors of the Federal Reserve, on a national basis households with net worth of at least $1 million, headed by a person age 60 or older, comprise 4% of all households but donated approximately 25% of all household charitable contributions in 2007 (the most recent year for which data is available).

The first paragraph of their 3-paragraph conclusion reads:

During the December 13, 2009 edition of “Meet the Press” former Chairman of the Federal Reserve, Alan Greenspan, touted the importance of rising stock prices to economic recovery. In a broader context Greenspan’s words highlight the importance of wealth to economic growth. During decades of research at the Center on Wealth and Philanthropy we have consistently found that wealthy households contribute disproportionately more to charitable causes both from their household assets and from their foundations, trusts, and donor advised funds.

Perhaps we would have less need for charity if we had a less concentrated distribution of wealth in America.  Perhaps, if we funded our local, state and federal spending via taxes on the value of the commons that individuals and corporations and other domestic and foreign entities claim as their own --  instead of taxing sales and wages and buildings -- we'd create more opportunity for more people to earn adequate incomes.

Until we do that, though, shouldn't we be collecting back this land appreciation once per generation, through taxes on the largest estates?

Looking Forward

Looking for the phrase "I am for men" (see an earlier post, below) I came across a 1906 book by August Cirkel (circa 1870-1946), of Chicago, entitled "Looking Forward."  His prefatory note is as follows:

An apology is, peradventure, due the memory of Edward Bellamy for the semi-plagiarism in the title of this book.  It is true that "Looking Backward" suggested the name I have given it. The ideally happy condition of all the people, that Mr. Bellamy pictured as resulting from socialism, I look forward to as a result of a higher development of individualism.

The variety of topics considered may make the work seem presumptuous.  But though the subjects are various, the same strain runs through all.   Like the Irishman with his shillalah at the county fair, wherever I have seen a monopoly head, I have taken a whack at it.  If there are any sore pates or broken craniums on account of my impartial and promiscuous blows, I shall know that I have not labored in vain.

A.C.

A passage in the middle of "Looking Forward" caught my eye, and I added the preceding ones for setting the scene.  In this age of "too big to fail" and 10% of our households having over 70% of the aggregate net worth, a lot still rings true after 100 years:

We have one concern controlling far more than half the oil, another more than half the iron, another half the coal, another forming to control much more than half the copper, a few combinations working towards ownership of all the railroads and steamship lines; another, meat; in our large cities, the public service corporations are one by one being gobbled up by the same group of capitalists who control these other companies. It is probably safe to say that the so-called trust crowd now controls at least forty percent of the business and wealth of the country; moreover, the portion so controlled is organized on such a basis that the profits exacted each year reach the public with almost the directness of a tax. Without exception each one of these gigantic monopolies makes millions in the way of earnings disbursed to pay interest on bonds and dividends on stocks.

The profits of the Standard Oil Company have averaged forty percent per annum for many years; others of these companies are nearly as successful. In ordinary business only the very few after a period of twenty or thirty years can show a larger capital than they had at starting, and many fall by the wayside; but each, and every one, of these giant corporations makes tremendous gains. The public seems to have acquiesced in their right to fix the tribute that they will levy each year, and has grown so accustomed to their demands as not to analyze this right.

A few years ago Henry George tried to stir the people to a realization of the wrongs contained in the private ownership of land; but excepting the few Single-tax Leaguers who still try to keep alive the fires he kindled, few have given serious consideration to this matter, and many think him to be a vain dreamer of impossible conditions.

His theory as to the manner of applying a remedy has doubtless estranged many who accede to the correctness of his views as to existing wrongs. His argument as to the natural right of all mankind to the earth, the air, and the waters on the earth or underneath it, cannot well be refuted.

Let us suppose ten families occupy an island, and that this island constitutes all the land on the earth. Now, assume that they organize a regular government, the rights of each and all being fully considered and agreed to by every one, and, further, that every individual is perfectly satisfied that justice has been done him. Suppose that they agree to divide the island into ten equal parts, giving each family an equal portion, for which a patent is issued by the government, each soul on the island being satisfied that the division is fair and also satisfied with his allotment. There being no one on earth except the ten families, and as they are all content and happy, at first blush it might appear that they had a right to make this apportionment, and that there is no element of wrong concealed anywhere in the transaction. In doing this they certainly would be doing no more than has been done by nearly every people in history, and on a much more equitable basis. They overlooked, however, the changes to be wrought by time. After the apportionment, let us say that the islanders, being ordinary human men and women, went about their vocations in the usual manner, and led their lives as humankind generally does; let us say that there existed among them the same differences in capacity and temperament and habit of life that commonly prevail among people — some being thrifty and industrious, others improvident and idle, as men have been, are now, and perhaps always will be. What would probably happen? In a short space of time possibly fifty percent of the population would sell their share in the island to the provident class, and in the course of time twenty-five percent might come to hold absolute title to all the land. In consequence, the children born of the families that sold their holdings would have no land. The children born to the twenty-five percent would own it all.

If the laws of the island were based on the same principles as now obtain in the laws of the United States, it would be perfectly lawful for the twenty-five percent to say to the seventy-five percent that they might work the land on shares, giving the landlords half of the product of their labor. As there would be no possibility of procuring a livelihood otherwise, this offer would have to be accepted, if the laws were obeyed.

Normally, it is hard enough for a laborer to gain his living by the sweat of his brow, though he gets the full product of his labor. How much more difficult the situation when half of all he produces must be handed to another! In Ireland the situation was parallel to this; the poor Irish tenants tilled the soil of their native land, but instead of getting the full product of their labor, a large portion was pitilessly exacted by alien landlords. In lesser degree in nearly every country on earth the situation is comparable to this, the burden being disguised in various ways.

We, then, have seventy-five percent of the islanders giving up to the twenty-five percent one half of the product of their labor. Assuming that the original ten families that organized the government and apportioned the island have all died, by what God-given principle should the seventy-five percent of the population be required to give half of the fruits of their efforts to the twenty-five percent? Yet under our own laws would this not be possible, yea, natural? Without doing anything whatever, the twenty-five percent would be getting a revenue one and a half times as great as they could produce if working on an equal basis with the others. Because their fathers had got possession of the island, these few without toil get half again as much as they could produce if toiling, while the rest, though constantly laboring, get only half of the results of their labor. There are doubtless those who will say that the thrift of the original provident islanders should entitle them to transmit their gain to their children. Very good, but how about the thrift of the seventy-five percent now? The twenty-five percent may be compared with the original spendthrifts, as they squander without toiling, and by a just continuance of the rule, the children of the thrifty toilers should get back the island. On the face of the proposition this would manifestly be impossible. Let us go a step farther. Suppose the twenty-five percent, grown haughty with power, exercise it so arbitrarily that the others object, would it not be possible under laws like the laws of the United States, for the minority to refuse the majority employment except on the terms of the minority? What must be the consequence? Either submission to slavery by the seventy-five percent or starvation, if the laws are obeyed, or revolution and rebellion, if they are not. It cannot be an answer to the argument to hold that the ordinary principles of morality would restrain the minority in their exactions. History has not demonstrated that those who grow great with power never grow greedy. Then, if there is no justice in requiring the seventy-five percent to give up half their labor, is there justice in a situation or in laws which compel this result?

In the United States we have not even been as fair as the islanders, no equal division ever having been made, nor has every person been satisfied that his share is just; yet most of the land has been passed to the possession of private owners by patent from the government, and the average man has always thought, and the average man now thinks, that as a general proposition this was just, although knowing and admitting the possibility of minor wrongs. People have had the notion of private ownership of land so thoroughly grounded by long custom, that it seems the natural, rather than the artificial, manner of holding. Community of interest is repugnant to most minds. Socialism is believed to be a theory that might answer the requirements of angels, but finds small space for application among the wingless crowd on earth. Yet if the principle of private ownership is wrong as applied to the island, is it not equally wrong with us?

A few years back, owing to financial stress in the business world, vast numbers of men were idle from inability to find employment. Coxey gathered together a tatterdemalion army of the riffraff, tramps, and bums of the country, and marched them to Washington to emphasize to Congress the hardship of the situation, and to beg relief. He was derided and jeered at every hand. The public looked upon the idea as one of a crank, laughed at it, and dismissed it from their minds. Yet out of this army of thousands, how many possibly were sincerely desirous of a chance to earn an honest livelihood? The country at that time was infested with tramps, but since times improved the majority of them have gone to work again, and Coxey is forgotten. But way down deep, unperceived by the casual thinker and busy every-day man, some elemental principle had been violated, and in consequence the deplorable condition resulted. These men had a right to live. They had a right to labor. They had as good a right as any one of us to use God's soil, and to breathe God's air, and pity for them on our part by no means fulfilled our duty towards them. Somehow, little they knew how; somewhere, little they knew where; some time, little they knew when,— they had been cheated of the rights that are due to every human being that comes upon this earth.

The Declaration of Independence holds it to be a self-evident truth, that all men are entitled to life, liberty, and the pursuit of happiness. What a grim sardonic joke this would be, if read some Fourth of July to a ragged army of a hundred thousand starving men, women, and children, willing to labor, but with naught to lay their hands to! Hollow, indeed, would it sound, and the mockery would be so apparent to the multitude that I doubt not they would feel that somehow a terrible injustice had been done them.

When the ten families divided the island they allotted what belonged to God, and not to themselves, except as a blessing flowing from Him. They had no right to alienate the title from the whole community. The island belongs to every child who is born upon it, and each has as good a right to its benefits as every other. The ten families deeded away what they had no right to. Posterity was not considered, but the child then unborn owed no duty to the agreements made adverse to his interests by incompetent, reckless, luckless, or improvident ancestors, who bartered away his birthright. It was not theirs to give.

We must all, high and low, rich and poor, young and old, somehow or other, directly or indirectly, get our living from the earth. Necessity compels every one to eat to live. How fulfill this necessity except by application to Nature? What right has any government so to shape its laws that one single human being is debarred from his God-given right to labor in order to sustain his life? Organize society as you will, if provision is not fully made to protect the unborn souls to come, an injury is done, a seed is planted that will grow and bear suffering.

Henry George's theory is correct. The land belongs to all, the air and the water belong to all. If we are on earth for a purpose, and the God of chance is not ruling our destiny, as no man who thinks deeply can believe, it behooves us to conform to Nature's laws. The rules of conduct prescribed by people hundreds of years ago should have no binding force upon us today against our reason. Because people have always divided the land, it is not proof positive that their methods have been correct. Humanity has not reached the acme of advancement by any means. Some things are done vastly better today than ever before in history. It seems as if progress is being made. The world seems to be growing better. Yet how would this be possible but by the correction of previous wrong conceptions? Progress can never be made contrary to Nature's law; the decay of the nations of history proves the inexorableness of her workings. Conformity to her decrees, through principles of justice, of liberty, of equality, has ever led to advancement at a tremendous pace; but selfish interests have always injected into the laws of the nations the virus of destruction; decay ensues, the people become enfeebled, corruption reigns, and dissolution follows through the onslaughts of vigorous, lusty races that have grown strong through meting out the justice which the older nations had forgotten.

No government is good that does not give the greatest consideration to its lowliest citizens.

Let's talk about "our lowliest citizens."  Recall that 10% of us have title to 71.5% of the aggregate net worth. The bottom 75% of us have an amazing 12.7% of the aggregate net worth.  A slightly different 10% of us receive 47.2% of the before-tax income, and 20% of us get 61.0% of the pre-tax income.  The bottom 60% of us share --  are you ready? -- 20.9% of the pretax income -- and most economists agree that we're paying 15% of that in social insurance taxes on our wages, plus federal and state income taxes, sales taxes, taxes on our buildings and on our land (if we own any).  (Remember Leona Helmsley's observation about who pays taxes.)

Looking forward ... to more of the same?  To a society which doesn't automatically enrich a small segment of us at the expense of the rest, who, most of us would agree, work equally hard, even if we're not in privileged categories of the real estate, finance, insurance or natural resources sectors, or otherwise endowed with a monopoly which feeds them so abundantly at the expense of others.

In many fast examinations of the Gilded Age, Edward Bellamy's book on socialism, "Looking Backward" is mentioned in the same sentence with Henry George's book best-selling "Progress & Poverty."  The former book seems to be more widely assigned reading, in courses which bring in original sources.  This is a shame.

The Monkeys Disgrace

A friend sent me this poem, which seems a complement to Uncivilized, by Edmund Vance Cooke (1866-1932).  I first heard Uncivilized at a CGO meeting in Alburquerque perhaps 5 or 7 years ago, when Everett Gross recited it from memory.  The third verse of this one seems to me to be a direct reference to Uncivilized.

The Monkeys Disgrace

Three monkeys sat in a coconut tree
Discussing things as they're said to be.
Said one to another, "Now listen, you two,
There's a certain rumor that cannot be true,
That man descends from our noble race -
The very idea is a disgrace.

No monkey ever deserted his wife,
Starved her babies and ruined her life;
And you've never known a mother monk
To leave her babies with others to bunk,
Or pass them on from one to another
Til they scarcely know who is their mother.

And another thing you'll never see -
A monk build a fence around a coconut tree
And let the coconuts go to waste,
Forbidding all other monks to taste.
Why, if I put a fence around this tree,
Starvation would force you to steal from me.

Here's another thing a monk won't do -
Go out at night and get on a stew,
Or use a gun or club or knife
To take some other monkey's life;

Yes, Man Descended - That ornery cuss -
But, brother, he didn't descend from us!"

     - anonymous

Uncivilized begins,

An ancient ape, once on a time,
Disliked exceedingly to climb,
And so he picked him out a tree
And said, "Now this belongs to me.
I have a hunch that monks are mutts
And I can make them gather nuts
And bring the bulk of them to me,
By claiming title to this tree." 

[read the entire poem here]

One source attributes The Monkeys Disgrace poem to Nettie Bates Thomas, another to Ogden Nash.   Yet another compares it to a 1950s Broadway show tune, which you can hear here.

But I've also found a lot of other attributions for it, some which date it back to within Cooke's lifetime: 

Land, labor and capital: cleaning up after the snow storm

Last Saturday, 2/6, the mid-Atlantic region received an amount of snow that exceeded what it normally gets in an entire winter.  By Sunday afternoon, major highways had a single lane well-plowed and a second one barely passable.  We had delayed our planned trip from Connecticut (where we're used to snow and our towns budget for snow removal) to southern Delaware (where snow is much less common) from Friday.  We arrived to find our destination had about 15" of snow and plowdrifts blocking the driveway.   We were grateful to have a very short driveway.  Having read a few local blogs, we'd packed 2 snow shovels, an ice hacker (MUTT = multi-use tough tool), some salt and a long pole for getting snow off trees, as well as boots and parkas.   Some young men cruising the neighborhood looking for work had one snow shovel, and they borrowed one of ours and moved enough snow to get our cars off the street.  We knew from the local blogs that shovels had sold out well before the snow started.  Had we thought more deeply, we'd have bought 5 or 10 at our CT grocery store to offer to neighbors.  I also wished we'd brought a Wovel with us; it would have had a great workout.

The next day, I went to see if anyone was in need of some shoveling help.  One neighbor's car was sitting on top of compacted snow, and the MUTT turned out to be just what we needed to break up that hardened snow.  The MUTT was also very helpful when I needed to hack through the plowdrifts, which had hardened.  Without it, I would have been much less productive; my shoulders would hurt more, and I would have gotten less done.

While there are many pickup trucks and tradesmen's SUV's in the area, almost none have snow plows here; snow of a quantity that would require it is so infrequent as to make it uneconomical.  Within a couple of days, though, some "bobcats" started to appear; I don't know how far away they came from. 

A second storm arrived Wednesday, bringing more snow.  We'd mostly cleared our driveway after the first storm, and getting the second cleaned out was easier.  State and local snow plow drivers were very kind and avoided socking us with a plow drift, once we'd opened our driveway the first time.

I titled this post "land, labor and capital."  Why?  Well, here are some of the thoughts that occupied me while I shoveled and hacked. 

• the young men who came looking for work on Sunday could not earn a living unless they had some land to work on -- in this case, ours.
• their single snow shovel -- capital -- made them far more productive than they would have been with no tools at all.  But their lack of a second shovel made them far less productive than they could otherwise be.  Even if they'd had funds to buy a second shovel, shovels were simply not available.
• having the right (specialized) tools for the job -- the MUTT, or a truck-mounted plow -- plus the skills to use them well makes a big difference in how much one can do with 10 minutes or 2 hours of labor.

I listened to a radio program coming out of nearby Washington, DC, which was largely shut down by the nearly unprecedented snows (there was no mail delivery from Saturday to Thursday; the federal government was pretty much shut down), and there was some discussion about whether towns and cities ought to spend taxpayer funds keeping inventory of plows to handle snows much heavier than what typically occurred, or whether perhaps there should be incentives for private individuals to own and maintain truck-mountable snow plows.  Did it make sense to tax everyone, say, $50 more per year to pay for better snow-management equipment if it would save $100 worth of productivity per person?

I no longer remember what I heard on the radio, and what parts of this were my own musings.  But it did pass through my mind that such things as snow removal ought to be financed not through taxes on people's wages or interest income, or on their purchases, but rather should be paid for by taxes on land value.   People are willing to pay more to live where better services are provided, where more consistent utilities are provided.

Taxing the poor people of Washington, D.C., many of whom are tenants, $50 each, and taxing the wealthy homeowners in Georgetown $50 each is not nearly as fair as taxing people in proportion to the value of the land they own.  Georgetown homeowners ought to be paying a lot more each than the owners of subdivided brownstones in less expensive neighborhoods.  And the tenants of those subdivided brownstones are paying significant rents to their landlords; their share of the costs of providing local services should come out of the payments their landlords receive, which are a function largely of their location in Washington, D.C., not luxurious landlord-provided amenities within those homes.

The tenants are already paying 30% or more of their income for housing, which seems to me to be a form of sharecropping; their landlords share in their labor.  For that matter, those of us who are paying mortgages are sharing our wages with a mortgage lender, who in turn paid off the seller of the property we're bought.  It is highly unlikely that more than half of the purchase price was for the improvements to the land (unless it is a brand new house in a fringy area); most of the purchase price -- and the mortgage payment -- are payments for land value.  And the seller didn't create that value, so it seems perverse and odd to me that he is the one who reaps what the community has sown. Our structure permits him to privatize this public investment.

The remedy, of course, is rather simple: shift our taxes OFF labor, OFF sales, OFF buildings ... and ONTO land value.  Many supposedly intractable problems will start to evaporate when we do that.  And we can do it very gradually if we choose, or expeditiously if we see fit.

The House of Tranquillity: A "Middle Class Agenda"

Op-Ed Columnist - The House of Tranquillity - NYTimes.com. Finally, Biden was asked to come up with a middle-class agenda. This is a surprisingly difficult job because many of these programs — credits for college affordability and child care — fairly reek of Clintonism. This is an administration that is staffed by Clintonites but does not want to appear Clintonian in any way.

Let's talk about America's middle class.  How should we define the middle class?  If we define it in terms of income, we find that the middle quintile of households in 2007 had median net worth of $88,100.  That is, of the middle 20% of us, half had household net worth of less than $88,100, and half had more.  That's not a whole lot of money to fall back on, particularly when one considers that much of that is home equity.

The same middle-income quintile had a median before-tax family income of $47,300.  That is, half had more, half had less.

That middle income quintile accounted for 10.9%  -- no!  that was the the 1989 figure.  By 2007, it was 7.54% -- of America's net worth in 2007. 

Here's how the net worth was distributed across the income quantiles in 2007:

• 	Top income decile:	59.45% of the net worth
  	Second income decile:	10.92% of the net worth
  Top income quintile:		70.37% of the net worth
  Second highest income quintile:		13.48% of the net worth
  Middle income quintile:		7.54% of the net worth
  Fourth highest income quintile:		4.84% of the net worth
  Bottom income quintile:		3.77% of the net worth

    [source: SCF chartbook, p. 43, and my calculations]

If we define the middle class more broadly -- as the middle 60% of the income distribution -- our "middle class" has 25.86% of the net worth.

And here's how the before-tax income was distributed across the same income quantiles:

	Top income decile:	47.19% of the before-tax income
	Second income decile:	13.77% of the before-tax income
Top income quintile:		60.96% of the before-tax income
Second highest income quintile:		18.18% of the before-tax income
Middle income quintile:		11.23% of the before-tax income
Fourth highest income quintile:		6.72% of the before-tax income
Bottom income quintile:		2.92% of the before-tax income
[Source: SCF Chartbook, page 7 and my calculations]

Using the broader definition of middle class -- again, the middle 60% of the income distribution -- our "middle class" has 36.13% of the before-tax income.

(Think of this quantile data as you read Bob Herbert's recent column "The Worst of the Pain.")

Alternatively, if we define the middle class in terms of net worth -- erase the above income-based definitions from your mind for the moment! -- here's the corresponding data:

The median household arranged according to net worth had net worth of $120,600 [source: SCF Chartbook, p. 39]  That doesn't sound so bad, does it?

Let's look at the net worth quantiles:

	Top net worth decile:	71.46% of aggregate net worth
	Second 15% of net worth holders:	15.83% of aggregate net worth
Top net worth quartile:		87.29% of aggregate net worth
Second highest net worth quartile:		10.21% of aggregate net worth
Third highest net worth quartile:		2.60% of aggregate net worth
Bottom net worth quartile:		-0.10% of aggregate net worth
[Source: SCF Chartbook, 2007, page 73]

The middle 50% of us, arranged according to net worth have 12.81% of the net worth.

If you define our middle class as those between the 50th and 85th percentiles of the net worth distribution, our middle class owns 26.04% of the net worth.

How is the income distributed across those same net worth quantiles?

	Top net worth decile:	41.25% of before-tax income
	Second 15% of net worth holders:	16.56% of before-tax income
Top net worth quartile:		57.81% of before-tax income
Second highest net worth quartile:		19.76% of before-tax income
Third highest net worth quartile:		13.80% of before-tax income
Bottom net worth quartile:		8.63% of before-tax income

The middle 50% of us, arranged according to net worth, have 33.56% of before-tax income

If you want to define our middle class as those between the 50th and 85th percentiles of the net worth distribution, our middle class is getting 36.32% of the before-tax income.  35% of us getting 36% of the income.  That's middle, I guess.

If you've gotten this far, I'll bet that you will think that we might want to tax income more heavily at the upper end of the income spectrum, or tax large estates more heavily.

I'm going to propose something different.  Something which digs deeper, and seeks the source, the cause of the problem, rather than trying to redistribute the income or net worth after the fact.

Henry David Thoreau, in Walden, wrote this:

There are a thousand hacking at the branches of evil to one who is striking at the root, and it may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve. It is the pious slave-breeder devoting the proceeds of every tenth slave to buy a Sunday's liberty for the rest. Some show their kindness to the poor by employing them in their kitchens. Would they not be kinder if they employed themselves there? You boast of spending a tenth part of your income in charity; maybe you should spend the nine tenths so, and done with it. Society recovers only a tenth part of the property then. Is this owing to the generosity of him in whose possession it is found, or to the remissness of the officers of justice?

Henry George wrote this, in the opening chapter ("The Problem") of Progress & Poverty (1879), describing the first 100 years of America's existence as a nation:

It is true that wealth has been greatly increased, and that the average of comfort, leisure, and refinement has been raised; but these gains are not general. In them the lowest class do not share. I do not mean that the condition of the lowest class has nowhere nor in anything been improved; but that there is nowhere any improvement which can be credited to increased productive power. I mean that the tendency of what we call material progress is in no wise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is to still further depress the condition of the lowest class. The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.

Now go back and look at the distributions of income and of net worth in America in 2007.  I've not provided the trend data here, but the 2007 snapshot tells the story well enough.

"I Am For Men"

That's the slogan on the two-story high advertising mural found recently on a building in Galesburg, Illinois.  (Photo here.)  It is an ad for Henry George 5 cent cigars.  (See also this page of cigar ads.)

The "I am for men" slogan was on a pin I found on ebay a few years ago.  The seller made some comment about it being anti-feminist.  Well, she or he didn't know much about George.

When I googled the phrase, I found some interesting things.  Here's one:

Henry George, a nineteenth-century American author and political economist, was nominated for the office of mayor of New York in 1886. He was called to a meeting at the Cooper Institute to speak to working men. The chairman of the meeting gave him a flowery introduction with the customary political rhetoric. The chairman concluded by saying, "Henry George is the friend of the working men." As soon as Mr. George rose to his feet, slowly and emphatically he said, "I would like to announce that I am not the friend of the working man." Stunned silence ensued -- a strange kind of bewilderment. He went on, "Nor am I the friend of capital. I am for men simply as men, regardless of any accidental or superfluous distinctions of race, creed, color, class, function, or employment."  [source.]

I found a front-page article in the Scranton (PA) Tribune and Kansas City Journal (among others) of October 30, 1897, the day after Henry George's death, which reported some of the campaign speeches George had given on his last day, a few days before the 1897 mayoral election.  Here is one of them:

At College Point there were 1,200 common laborers, a rough crowd, closely packed in the hall.  Mr. George was introduced as the friend of the working man.

He began: "I have never claimed to be a friend of the workingmen.  I do not now make any such claim (there was a pause of dead silence).  I have not and do not intend to advocate anything in the special interest of the laboring man (another dead pause; Mr. George walked the full length of the platform and let out his full voice in a shout:).  I am for men! (The crowd set up such a cheering and stamping that the room was filled with a choking dust).  I am for men! -- the equal rights of all men.  Let us be done with asking privileges for the laboring men."

I also found a 1906 book called "Looking Forward," by August Cirkel, which has a chapter by that title which starts with these paragraphs:

"I am for men." This famous expression, uttered by Henry George, sounds the keynote of the true spirit in which every public policy should be tested. Does it make men? Does it make them stronger, or wiser, or better? These are the all-important questions to be asked, when the effect of any system is to be noted. If the answer cannot be made affirmatively, sophistical must be the arguments that support it.

The kind of laws and institutions any people lives under is the kind of laws and institutions that that people deserves to live under. Every thing of life builds the body that it inhabits, and what kind of abode it constructs for itself, that is the kind of abode it must dwell in. Every people makes its own government. Where a race is ruled by tyrants, craven fear smites the hearts of the masses, and rather than endure the dangers of asserting their divine prerogative of freedom, they shuffle through life in cowardly submission to a few men no stronger than themselves.

I found a 1910 speech by Theodore Roosevelt, entitled "New Nationalism" which contains these paragraphs:

I believe in shaping the ends of government to protect property as well as human welfare. Normally, and in the long run, the ends are the same; but whenever the alternative must be faced, I am for men and not for property, as you were in the Civil War. I am far from underestimating the importance of dividends; but I rank dividends below human character. Again, I do not have any sympathy with the reformer who says he does not care for dividends. Of course, economic welfare is necessary, for a man must pull his own weight and be able to support his family. I know well that the reformers must not bring upon the people economic ruin, or the reforms themselves will go down in the ruin. But we must be ready to face temporary disaster, whether or not brought on by those who will war against us to the knife. Those who oppose reform will do well to remember that ruin in its worst form is inevitable if our national life brings us nothing better than swollen fortunes for the few and the triumph in both politics and business of a sordid and selfish materialism.

Near the end of the same speech, TR says this:

One of the fundamental necessities in a representative government such as ours is to make certain that the men to whom the people delegate their power shall serve the people by whom they are elected, and not the special interests. I believe that every national officer, elected or appointed, should be forbidden to perform any service or receive any compensation, directly or indirectly, from interstate corporations; and a similar provision could not fail to be useful within the States.

The object of government is the welfare of the people. The material progress and prosperity of a nation are desirable chiefly so long as they lead to the moral and material welfare of all good citizens. Just in proportion as the average man and woman are honest, capable of sound judgment and high ideals, active in public affairs; but, first of all, sound in their home, and the father and mother of healthy children whom they bring up well; just so far, and no farther, we may count our civilization a success.

(TR by that time had become quite comfortable with Henry George's ideas. See his party's 1912 platform "A Confession of Faith.")

In 1917, Luke North (James Hartness Griffes) published a book of poetry entitled "Songs of the Great Adventure" which included this:

"I AM FOR MEN"

He stood for Men —
Not for parties, sections, classes;
Not for dogmas, doctrines, isms —
Nor all the minutiae of over-elaborated plans for the future,
Nor for craven caution, dissimulation, equivocation —
Patience that now outrages virtue —
Program'd ways and means which if not followed
The world may stay in hell.

He stood for Men —
For in his soul he knew the line of cleavage
Was not between the robber and the robbed —
Was not marked by external difference,
By rank or class or occupation or wealth or poverty.
He knew that poor men could be very cruel and rich men kind.
He knew the line of cleavage was in the heart — those who care and those who don't —
This Henry George who wrote "Progress and Poverty."

He stood for Men —
And was he wrong to yield no tithe to classes?
What has now become of all the appeals
To class interest, class consciousness, class solidarity?
The human heart will not respond to them — in every class are tyrants.
The human mass forgets its every interest,
Flings to the wind all self and class advantage
And goes out to die for a word.

He stood for Men —
And showed the world how to unshackle the chains that bind men.
He showed how poverty begins,
Where modern slavery has its roots,
And how to tear them up.
The earth is for all men, he said —
And his word has gone around the world —
And now it's time to act!

He stood for Men —
Not creeds and doctrines, nor all the lesser details of future contingencies.
He bared the earth to man.
It is for us to take it.
He tried to gain it, and was beaten back to his death.
Now we will gain it —
At whatever cost!

Check out this fine book of poetry -- and if you know of a songwriter looking for inspiration, send them to this starting page.

It is ironic that Henry George's name became associated with cigars.  He smoked, and that likely contributed to his premature death at age 58.   He wrote about cigar-making and taxation as follows, in Chapter 8 of "Protection or Free Trade?"

It is no wonder that princes and ministers anxious to make their revenues as large as possible should prefer a method that enables them to "pluck the goose without making it cry," nor is it wonderful that this preference should be shared by those who get control of popular governments; but the reason which renders indirect taxes so agreeable to those who levy taxes is a sufficient reason why a people jealous of their liberties should insist that taxes levied for revenue only should be direct, not indirect.

It is not merely the ease with which indirect taxes can be collected that urges to their adoption. Indirect taxes always enlist active private interests in their favor. The first rude device for making the collection of taxes easier to the governing power is to let them out to farm. Under this system, which existed in France up to the Revolution, and still exists in such countries as Turkey, persons called farmers of the revenue buy the privilege of collecting certain taxes and make their profits, frequently very large, out of the greater amount which their vigilance and extortion enable them to collect. The system of indirect taxation is essentially of the same nature.

The tendency of the restrictions and regulations necessary for the collection of indirect taxes is to concentrate business and give large capital an advantage. For instance, with a board, a knife, a kettle of paste and a few dollars' worth of tobacco, a competent cigar maker could set up in business for himself, were it not for the revenue regulations. As it is, in the United States, the stock of tobacco which he must procure is not only increased in value some two or three times by a tax upon it; but before the cigar maker can go to work he must buy a manufacturer's license and find bonds in the sum of five hundred dollars. Before he can sell the cigars he has made, he must furthermore pay a tax on them, and even then if he would sell cigars in less quantities than by the box he must buy a second license. The effect of all this is to give capital a great advantage, and to concentrate in the hands of large manufacturers a business in which, if free, workmen could easily set up for themselves.

But even in the absence of such regulations indirect taxation tends to concentration. Indirect taxes add to the price of goods not only the tax itself but also the profit upon the tax. If on goods costing a dollar a manufacturer or merchant has paid fifty cents in taxation, he will now expect profit on a dollar and fifty cents instead of upon a dollar. As, in the course of trade, these taxed goods pass from hand to hand, the amount which each successive purchaser pays on account of the tax is constantly augmenting. It is not merely inevitable that consumers have to pay considerably more than a dollar for every dollar the government receives, but larger capital is required by dealers. The need of larger capital for dealing in goods that have been enhanced in cost by taxation, the restrictions imposed on trade to secure the collection of the tax, and the better opportunities which those who do business on a large scale have of managing the payment or evading the tax, tend to concentrate business, and, by checking competition, to permit large profits, which must ultimately be paid by consumers. Thus the first payers of indirect taxes are generally not merely indifferent to the tax, but regard it with favor.

The other passage about cigars which I recalled turned out to be not from Henry George, but from his friend Louis F. Post, who went on to be President Wilson's Secretary of Labor:

Though land value has no effect upon the price of good, it is easier to sell goods in some locations than in others. Therefore, though the price and the profit of each sale be the same, or even less, in good locations than in poorer ones, aggregate receipts and aggregate profits are much greater at the good location. And it is out of his aggregate, and not out of each profit, that rent is paid, For example: A cigar store on a thoroughfare supplies a certain quality of cigar for fifteen cents. On a side street the same quality of cigar can be bought no cheaper. Indeed, the cigars there are likely to be poorer, and therefore really dearer. Yet ground rent on the thoroughfare is very high compared with ground rent on the sidestreet. How, then, can the first dealer, he who pays the high ground rent, afford to sell as good or better cigars for fifteen cents than his competitor of the low priced location? Simply because he is able to make so many more sales with a given outlay of labor and capital in a given time that his aggregate profit is greater. This is due to the advantage of his location, and for that advantage he pays a premium in higher ground rent. But that premium is not charged to smokers; the competing dealer of the side street protects them. It represents the greater ease, the lower cost, of doing a given volume of business upon the site for which it is paid; and if the state should take any of it, even the whole of it, in taxation, the loss would be finally borne by the owner of the advantage which attaches to that site — by the landlord. Any attempt to shift it to tenant or buyer would be promptly checked by the competition of neighboring but cheaper land.

Location, location, location!  Or, as a friend in the advertising business put it when I told him about George's ideas, Location, Location, Taxation!

Do We Really Have to Create Man-made Misery to Supplement What Nature Provides?

As I read and listen to and watch the news -- earthquake, ice storms -- and think about the past year -- floods, fires, mudslides, hurricanes, nor'easters, more earthquakes -- it seems to me that nature provides us plenty of opportunities to exercise our compassion and charity, individually and as a nation, and plenty of spending opportunities for maintaining necessary infrastructure.

We don't need to maintain economic structures which create additional human misery.  There is enough without them.

We can't control nature. But we CAN correct man-made structures which victimize our fellow human beings.

We don't need poverty in the world.  We could manage just fine without it.

It is time to delve into those structures, and get to the root of them.

When we get to the root, we'll recognize it and know what to do about it. 

When we've done that, our safety nets will be there for those who have health problems, or accidents, or are victims of nature's whims.  We'll be able to devote our energies and funds to things which can't be avoided -- acts of nature -- instead of trying to patch up the victims of our economic system.

Here and abroad.

Go to the root of the problem.

Where do you start?  Read Henry George.  Start with the speeches linked from the front page of http://www.wealthandwant.com/, and then, if something in his thought resonates, move on to Social Problems (ditto) and then "Progress & Poverty, at http://www.progressandpoverty.org

The good news is that economics need not be a dismal science.  When viewed through the lenses of the classical economists, a lot more things look a lot more fixable.

Poverty is a structural problem.  Nothing we try to do for or with individuals is going to make the least bit of difference in the structures which are producing poverty.   While I applaud the hearts and efforts of those who seek to improve the lives of individuals afflicted with poverty through charity, through education, through aid, even through job creation, none of these things is going to end poverty until we correct the structures which take for some that which others create.  You might move one person from being a sower to being a reaper, but you aren't going to reduce the problem of some being permitted to reap what others sow until you attack the structures which permit it!

And isn't it government's job to create and promote structures which protect all of us from exploitation by others?

"The End of Poverty? Think Again"

The new film, "The End of Poverty? Think Again" had its NYC premier back in November, and is now back for a second round.

I commend it to your attention.  It is beautifully filmed, and, while it doesn't provide clear answers, it raises a lot of important questions -- different questions from the ones commonly being discussed -- and considers them in light not only of economic justice, but also the sustainability of our planet.

You can watch a number of clips on YouTube ... start at http://www.youtube.com/user/CinemaLibre2 and you'll see links to many excerpts and some outtakes, interviews with the director, and a review.

The title is a direct challenge to Jeffrey Sachs' 2005 book "The End of Poverty." The film looks for the roots of global poverty, and who benefits from the current structure.  It provides a lot to think about.

Here are three websites I encourage you to explore

• the film company's website, http://theendofpoverty.com  This will tell you where you can find the film and provides some additional clips.

• A Georgist Perspective on the film "The End of Poverty?", http://povertythinkagain.com/
• A companion book for the film, "Why Global Poverty?" http://whyglobalpoverty.com/  available at the online bookstore at http://www.schalkenbach.org/

The solutions to poverty that most people are talking about -- microcredit, vaccines, drinking water improvements, etc. -- are not going to put a major dent in the problem.  None of them, and no combination of them, goes to the ROOT of the problem, the underlying cause.

I'm actually not altogether sure that the filmmaker himself fully understands the root of the problem -- but it seems to me that he is at least on the right track.   And I think his film has the potential to get the conversation going, which is a lot better than where we've been.

When I think about the other proposals that are being made to end poverty, I think of a passage from Henry George, the beginning of a chapter called "The Robber That Takes All That is Left:"

Labor may be likened to a man who as he carries home his earnings is waylaid by a series of robbers. One demands this much, and another that much, but last of all stands one who demands all that is left, save just enough to enable the victim to maintain life and come forth next day to work. So long as this last robber remains, what will it benefit such a man to drive off any or all of the other robbers?

I'm not saying that disabling or disposing of some of these other robbers isn't noble work.  But we ought not to fool ourselves that it is sufficient.  And we're operating in the dark if most people don't even realize the existence of that other robber, who also robs them, day in and day out.   

Remember that in America, which has, most of us think, solved most of the problems these people set out to solve, has tremendous concentration of wealth:

10% of us hold 71.5% of the aggregate net worth.  The next 10% have 13.5%.

That doesn't leave a whole lot for the bottom 80% of us.  And recent developments, including the Supreme Court decision in Citizens United, lead some of us to expect that wealth will concentrate further in America.

MLK: An edifice which produces beggars needs restructuring

Beyond Vietnam--A Time to Break Silence

Reverend King gave this speech at the Riverside Church in New York on 4 April 1967, a year before his death.   I was intrigued to note how frequently he mentions land reform as important.

Perhaps the most stirring paragraph is this one:

A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand, we are called to play the Good Samaritan on life's roadside, but that will be only an initial act. One day we must come to see that the whole Jericho Road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life's highway. True compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring.

I think of the wealth distribution within America (2007) or throughout the world.  I think of some paragraphs from Henry George's book "Protection or Free Trade" (Chapter 25) which speak of "the robber that takes all that is left."  I'll share them at the bottom of this post. I think of some writings on the subject of piracy.