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http://www.earthsharing.org.au/index.php?module=Website&action=Text&content=1128483975812-9564&parentContent=1125898811168-0064
The Consequences of Land
Speculation
are Tenantry and
Debt on the Farms,
and Slums and Luxury in the Cities
by Upton Sinclair
I know of a woman — I have never had
the pleasure of making her acquaintance, because she lives
in a lunatic asylum, which does not happen to be on my
visiting list. This woman has been mentally incompetent
from birth. She is well taken care of, because her father
left her when he died the income of a large farm on the
outskirts of a city. The city has since grown and the land
is now worth, at conservative estimate, about twenty
million dollars. It is covered with office buildings, and
the greater part of the income, which cannot be spent by
the woman, is piling up at compound interest. The woman
enjoys good health, so she may be worth a hundred million
dollars before she dies.
I choose this case because it is one about which there can
be no disputing; this woman has never been able to do
anything to earn that twenty million dollars. And if a
visitor from Mars should come down to study the situation,
which would he think was most insane, the unfortunate
woman, or the society which compels thousands of people to
wear themselves to death in order to pay her the income of
twenty million dollars?
The fact that this woman is insane makes it easy to see
that she is not entitled to the "unearned increment" of the
land she owns. But how about all the other people who have
bought up and are holding for speculation the most
desirable land? The value of this land increases, not
because of anything these owners do — not because of
any useful service they render to the community — but
purely because the community as a whole is crowding into
that neighborhood and must have use of the land.
The speculator who bought this land thinks that he deserves
the increase, because he guessed the fact that the city was
going to grow that way. But it seems clear enough that his
skill in guessing which way the community was going to
grow, however useful that skill may be to himself, is not
in any way useful to the community. The man may have
planted trees, or built roads, and put in sidewalks and
sewers; all that is useful work, and for that he should be
paid. But should he be paid for guessing what the rest of
us were going to need?
Before you answer, consider the consequences of this
guessing game. The consequences of land speculation are
tenantry and debt on the farms, and slums and luxury in the
cities. A great part of the necessary land is held out of
use, and so the value of all land continually increases,
until the poor man can no longer own a home. The value of
farm land also increases; so year by year more independent
farmers are dispossessed, because they cannot pay interest
on their mortgages. So the land becomes a place of serfdom,
that land described by the poet, "where wealth accumulates
and men decay." The great cities fill up with festering
slums, and a small class of idle parasites are provided
with enormous fortunes, which they do not have to earn, and
which they cannot intelligently spend.
This condition wrecked every empire in the history of
mankind, and it is wrecking modern civilization. One of the
first to perceive this was Henry George, and he worked out
the program known as the Single Tax. Let society as a whole
take the full rental value of land, so that no one would
any longer be able to hold land out of use. So the value of
land would decrease, and everyone could have land, and the
community would have a great income to be spent for social
ends.
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wealthandwant note: more precisely, the
value of land would not be reduced; rather
its selling price would decrease, making it
affordable to those who would use it.
(Further, because the user would not be paying
other taxes, he would likely have more to invest in
improving the property.)
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A few years ago, out here in Southern California, a fine
enthusiast by the name of Luke North started what he called
the "Great Adventure"
movement, to carry California for the Single Tax. I did
what I could to help, and in the course of the campaign
discovered what I believe is the weakness of the Single Tax
movement. Our opponents, the great rich bankers and land
speculators of California, persuaded the poor man that we
were going to put all taxes on this poor man's lot, and to
let the rich man's stocks and bonds, his inheritance, his
wife's jewels, and all his income, escape taxation. The
poor man swallowed this argument, and the "Great Adventure"
did not carry California.
So, I no longer advocate the Single Tax. I advocate many
taxes. I want to tax the rich man's stocks and bonds, also
his income, and his inheritances, and his wife's jewels. In
addition, I advocate a land tax, but one graduated like the
income tax. If a man or a corporation owns a great deal of
land, I want to tax him on the full rental value. If he
owns only one little lot, I don't want to tax him at all.
Some day that measure will come before the voters of
California, and then I should like to see the bankers and
land speculators of the state persuade the poor man that
the measure would not be to the poor man's advantage!
...I have before me a little book entitled "Enclaves of
Economic Rent," by C. W. Huntington....This book is
published by Mr. Fiske Warren, a millionaire paper
manufacturer who lives at Harvard, Massachusetts, and
believes in the Single Tax by way of enclaves....I sought
to persuade Mr. Warren that a great crisis was impending;
that the inequality of wealth in our society a thing
continually growing worse, was bound to bring a smash-up
long before mankind had been persuaded to live in enclaves.
To this Mr. Warren answered, in substance: "You may be
right; but if this civilization collapses, something else
will have to be put in its place, and it may be useful to
men to have a model of a better community."
| "Enclaves of Economic Rent" was issued
annually for a number of years. This article appeared
in the 1924 edition. |
...How are these enclaves run? The principle is very
simple. The community owns the land, and fixes the site
value year by year, and those who occupy the land pay the
full rental value of the land they occupy. Improvements of
any kind are not taxed; you pay only for the use of what
nature and the community have created. The community takes
all this wealth and uses it, first to pay all the taxes on
the land [and buildings -ds] the remaining money being
expended for community purposes, by the democratic vote of
all.
What this means in practice you can see from the town of
Fairhope, Alabama. Fairhope began nearly thirty years ago,
with three hundred and fifty acres, and now has nearly four
thousand acres. Its land is estimated to be worth a million
dollars. But instead of this wealth being distributed among
private owners, in accordance with the guessing power or
each individual, the whole rental value is the property of
the community, and the whole community prospers by the
labors of each one.
What this means in the way of moral values you may judge
from one sentence in the little book: and I will follow the
example of the book and quote this sentence in the same
cold and unemotional fashion: "No resident of Fairhope has
been defendant in a criminal case in county court." Perhaps
I should add that there is no place except the county court
where anyone could be a defendant; there has never been a
court or jail or anything of that sort in Fairhope.
Or take the colony of Arden, Delaware, which is just south
of Philadelphia. I could not say that no resident of Arden
has ever been a defendant in a court — I myself
having been one of eleven men who were arrested by a
constable from the city of Wilmington, and sent to prison
for the crime of playing baseball and tennis on Sunday! It
is that kind of humorous story which you read about Arden,
and not the serious efforts which are there being made to
solve a great and pressing social problem.
In Philadelphia, as in all our great cities, are enormously
wealthy families, living on hereditary incomes derived from
crowded slums. Here and there among these rich men is one
who realizes that he has not earned what he is consuming,
and that it has not brought him happiness, and is bringing
still less to his children. Such men are casting about for
ways to invest their money without breeding idleness and
parasitism. Some of them might be grateful to learn about
this enclave plan, and to visit the lovely village of
Arden, and see what its people are doing to make possible a
peaceful and joyous life, even in this land of bootleggers
and jazz orchestras.
The above essay by Upton Sinclair is from
Enclaves of Economic Rent, C.
W. Huntington (ed), Fiske Warren, Harvard Massachusetts,
1924
DAN SULLIVAN OBSERVES:
What I find particularly interesting is a passage that, to
me, shows how class envy was used to shift us from the
highly principled Georgist message to the "us-them" Marxist
message. Here is the passage to which I refer:
"A few years ago, out here in Southern California, a fine
enthusiast by the name of Luke North started what he
called the "Great Adventure" movement, to carry
California for the Single Tax. I did what I could to
help, and in the course of the campaign discovered what I
believe is the weakness of the Single Tax movement. Our
opponents, the great rich bankers and land speculators of
California, persuaded the poor man that we were going to
put all taxes on this poor man's lot, and to let the rich
man's stocks and bonds, his inheritance, his wife's
jewels, and all his income, escape taxation. The poor man
swallowed this argument, and the "Great Adventure" did
not carry California.
"So, I no longer advocate the Single Tax. I advocate many
taxes. I want to tax the rich man's stocks and bonds,
also his income, and his inheritances, and his wife's
jewels. In addition, I advocate a land tax, but one
graduated like the income tax. If a man or a corporation
owns a great deal of land, I want to tax him on the full
rental value. If he owns only one little lot, I don't
want to tax him at all. Some day that measure will come
before the voters of California, and then I should like
to see the bankers and land speculators of the state
persuade the poor man that the measure would not be to
the poor man's advantage!"
Of course, what happened when lefties like Upton Sinclair
sold out to the expedient of class envy, was that the
privileged classes strategically caved on these other
taxes, so that now we do tax the rich man's stocks and
bonds (and also the poor man's retirement funds) and his
inheritances (if he is not rich enough to hold them
overseas) and his wife's jewels (which merely causes
unemployment among jewelers). And since these various
unprincipled measures have been disastrous, people are
now suspicious of any tax that falls on the rich,
including the one proper tax, for which Mr. Sinclair, had
he not been impatient for cheap victories, would have
held out.
It is often asserted that Henry George paved the way for
the Progressive Movement, which in turn paved the way for
the Socialist Movement. This passage, to me, is the
*essential* description of how our own "allies" derailed
us.
Thus I regard as critically important, the following
passage from paragraph 18 of Tom Paine's "Agrarian
Justice":
"While, therefore, I advocate the right, and interest
myself in the hard case of all those who have been thrown
out of their natural inheritance by the introduction of
the system of landed property, I equally defend the right
of the possessor to the part which is his."
We must oppose those who would make public property
private, but we must equally oppose those who would make
private property public. In my opinion, Georgism was
undone, not by its enemies, but by its shallower allies
who were more enamored of victory than of
principle.
The rest of the Upton Sinclair article is wonderful, but
this passage is especially wonderful in its own perverse
way, because it is a window into exactly where the
movement went astray.
Dan Sullivan
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