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Land Monopoly Capitalism
Capitalism is a very fine system, and the U.S. really
ought to try it sometime! That is one of the themes of
this website.
What we have now is Capitalism on a Tilted
Playing Field. No wonder so many of us are
struggling to earn enough to support our selves and our
families.
It isn't that capitalism isn't the best system (I'm
persuaded that it is), but rather that we
aren't yet operating under a truly capitalist
system. "Land monopoly capitalism" seems to me to be
the best shorthand description of what we have now
— and it isn't producing widely shared prosperity
or genuine equality of opportunity, both of which are
key criteria on which a system should be judged. Ours
is lacking, and I believe that Henry George points to
the remedy which will correct the tilt.
As long as we permit individuals, families, trusts
and corporations to privatize economic value that
rightly belongs to all of us, and then to fund
government spending via taxes on wages and products, we
are permitting a system designed to concentrate income
and wealth in a small segment of our population. This
is theft of the worst sort — legalized theft. A
fresh robbery every day.
Rousseau
The first man who, having enclosed a piece of
ground, bethought himself of saying, “This is
mine”, and found people simple enough to believe
him, was the real founder of civil
society.
From how many crimes, wars and murders, from how
many horrors and misfortunes, might not anyone have saved mankind by pulling up
the stakes, filling in the ditch, and crying to his
fellows, “BEWARE OF LISTENING TO THIS IMPOSTOR;
YOU ARE UNDONE IF YOU ONCE FORGET THAT THE FRUITS OF
THE EARTH BELONG TO US ALL, AND THE EARTH ITSELF TO
NOBODY.”
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty,
Chapter 5: The Basic Cause of Poverty (in the
unabridged:
Book V: The Problem Solved)
... For land is the habitation of man, the storehouse
upon which he must draw for all his needs, the material
to which his labor must be applied for the supply of
all his desires; for even the products of the sea
cannot be taken, the light of the sun enjoyed, or any
of the forces of nature utilized, without the use of
land or its products. On the land we are born, from it
we live, to it we return again — children of the
soil as truly as is the blade of grass or the flower of
the field. Take away from man all that belongs to land,
and he is but a disembodied spirit. Material progress
cannot rid us of our dependence upon land; it can but
add to the power of producing wealth from land; and
hence, when land is monopolized, it might go on to
infinity without increasing wages or improving the
condition of those who have but their labor. It can but
add to the value of land and the power which its
possession gives. Everywhere, in all times, among all
peoples, the possession of land is the base of
aristocracy, the foundation of great fortunes, the
source of power. ... read the whole
chapter
The elder Mirabeau, we are told, ranked the
proposition of Quesnay, to substitute one single tax on
rent (the impôt unique) for all other
taxes, as a discovery equal in utility to the invention
of writing or the substitution of the use of money for
barter.
To whosoever will think over the matter, this saying
will appear an evidence of penetration rather than of
extravagance. The advantages which would be gained by
substituting for the numerous taxes by which the public
revenues are now raised, a single tax levied upon the
value of land, will appear more and more important the
more they are considered. ...
Consider the effect upon the production of
wealth.
To abolish the taxation which, acting and reacting,
now hampers every wheel of exchange and presses upon
every form of industry, would be like removing an
immense weight from a powerful spring. Imbued with
fresh energy, production would start into new life, and
trade would receive a stimulus which would be felt to
the remotest arteries. The present method of taxation
operates upon exchange like artificial deserts and
mountains;
-
it costs more to get goods through a custom
house than it does to carry them around the
world.
-
It operates upon energy, and industry, and
skill, and thrift, like a fine upon those
qualities.
-
If I have worked harder and built myself a good
house while you have been contented to live in a
hovel, the taxgatherer now comes annually to make
me pay a penalty for my energy and industry, by
taxing me more than you.
-
If I have saved while you wasted, I am mulct,
while you are exempt.
-
If a man build a ship we make him pay for his
temerity, as though he had done an injury to the
state;
-
if a railroad be opened, down comes the tax
collector upon it, as though it were a public
nuisance;
-
if a manufactory be erected we levy upon it an
annual sum which would go far toward making a
handsome profit.
-
We say we want capital, but if any one
accumulate it, or bring it among us, we charge him
for it as though we were giving him a
privilege.
-
We punish with a tax the man who covers barren
fields with ripening grain,
-
we fine him who puts up machinery, and him who
drains a swamp.
How heavily these taxes burden production only those
realize who have attempted to follow our system of
taxation through its ramifications, for, as I have
before said, the heaviest part of taxation is that
which falls in increased prices.
To abolish these taxes would be to lift the whole
enormous weight of taxation from productive industry.
The needle of the seamstress and the great manufactory;
the cart horse and the locomotive; the fishing boat and
the steamship; the farmer's plow and the merchant's
stock, would be alike untaxed. All would be free to
make or to save, to buy or to sell, unfined by taxes,
unannoyed by the taxgatherer. Instead of saying to the
producer, as it does now, "The more you add to the
general wealth the more shall you be taxed!" the state
would say to the producer, "Be as industrious, as
thrifty, as enterprising as you choose, you shall have
your full reward! You shall not be fined for making two
blades of grass grow where one grew before; you shall
not be taxed for adding to the aggregate wealth."
And will not the community gain by thus refusing to
kill the goose that lays the golden eggs; by thus
refraining from muzzling the ox that treadeth out the
corn; by thus leaving to industry, and thrift, and
skill, their natural reward, full and unimpaired? For
there is to the community also a natural reward. The
law of society is, each for all, as well as all for
each. No one can keep to himself the good he may do,
any more than he can keep the bad. Every productive
enterprise, besides its return to those who undertake
it, yields collateral advantages to others. If a man
plant a fruit tree, his gain is that he gathers the
fruit in its time and season. But in addition to his
gain, there is a gain to the whole community. Others
than the owner are benefited by the increased supply of
fruit; the birds which it shelters fly far and wide;
the rain which it helps to attract falls not alone on
his field; and, even to the eye which rests upon it
from a distance, it brings a sense of beauty. And so
with everything else. The building of a house, a
factory, a ship, or a railroad, benefits others besides
those who get the direct profits.
Well may the community leave to the individual
producer all that prompts him to exertion; well may it
let the laborer have the full reward of his labor, and
the capitalist the full return of his capital. For the
more that labor and capital produce, the greater grows
the common wealth in which all may share. And in the
value or rent of land is this general gain expressed in
a definite and concrete form. Here is a fund which the
state may take while leaving to labor and capital their
full reward. With increased activity of production this
would commensurately increase.
And to shift the burden of taxation from production
and exchange to the value or rent of land would not
merely be to give new stimulus to the production of
wealth; it would be to open new opportunities. For
under this system no one would care to hold land unless
to use it, and land now withheld from use would
everywhere be thrown open to improvement. ...
And it must be remembered that this would apply, not
merely to agricultural land, but to all land. Mineral
land would be thrown open to use, just as agricultural
land; and in the heart of a city no one could afford to
keep land from its most profitable use, or on the
outskirts to demand more for it than the use to which
it could at the time be put would warrant. Everywhere
that land had attained a value, taxation, instead of
operating, as now, as a fine upon improvement, would
operate to force improvement. Whoever planted an
orchard, or sowed a field, or built a house, or erected
a manufactory, no matter how costly, would have no more
to pay in taxes than if he kept so much land idle.
-
The monopolist of agricultural land would be
taxed as much as though his land were covered with
houses and barns, with crops and with stock.
-
The owner of a vacant city lot would have to pay
as much for the privilege of keeping other people
off of it until he wanted to use it, as his
neighbor who has a fine house upon his lot.
-
It would cost as much to keep a row of
tumble-down shanties upon valuable land as though
it were covered with a grand hotel or a pile of
great warehouses filled with costly goods.
Thus, the bonus that wherever labor is most
productive must now be paid before labor can be exerted
would disappear.
-
The farmer would not have to pay out half his
means, or mortgage his labor for years, in order to
obtain land to cultivate;
-
the builder of a city homestead would not have
to lay out as much for a small lot as for the house
he puts upon it*;
-
the company that proposed to erect a manufactory
would not have to expend a great part of its
capital for a site.
-
And what would be paid from year to year to the
state would be in lieu of all the taxes now levied
upon improvements, machinery, and stock. ...
read
the whole chapter
But great as they thus appear, the advantages of a
transference of all public burdens to a tax upon the
value of land cannot be fully appreciated until we
consider the effect upon the distribution of
wealth.
Tracing out the cause of the unequal distribution of
wealth which appears in all civilized countries, with a
constant tendency to greater and greater inequality as
material progress goes on, we have found it in the fact
that, as civilization advances, the ownership of land,
now in private hands, gives a greater and greater power
of appropriating the wealth produced by labor and
capital.
Thus, to relieve labor and capital from all
taxation, direct and indirect, and to throw the burden
upon rent, would be, as far as it went, to counteract
this tendency to inequality, and, if it went so far as
to take in taxation the whole of rent, the cause of
inequality would be totally destroyed. Rent, instead of
causing inequality, as now, would then promote
equality. Labor and capital would then receive the
whole produce, minus that portion taken by the state in
the taxation of land values, which, being applied to
public purposes, would be equally distributed in public
benefits.
That is to say, the wealth produced in every
community would be divided into two portions.
-
One part would be distributed in wages and
interest between individual producers, according to
the part each had taken in the work of
production;
-
the other part would go to the community as a
whole, to be distributed in public benefits to all
its members.
In this all would share equally — the weak
with the strong, young children and decrepit old men,
the maimed, the halt, and the blind, as well as the
vigorous. And justly so — for while one part
represents the result of individual effort in
production, the other represents the increased power
with which the community as a whole aids the
individual.
Thus, as material progress tends to increase rent,
were rent taken by the community for common purposes
the very cause which now tends to produce inequality as
material progress goes on would then tend to produce
greater and greater equality.
Who can say to what infinite powers the
wealth-producing capacity of labor may not be raised by
social adjustments which will give to the producers of
wealth their fair proportion of its advantages and
enjoyments! With present processes the gain would be
simply incalculable, but just as wages are high, so do
the invention and utilization of improved processes and
machinery go on with greater rapidity and ease.
But I shall not deny, and do not wish to lose sight
of the fact, that while thus preventing waste and thus
adding to the efficiency of labor, the equalization in
the distribution of wealth that would result from the
simple plan of taxation that I propose, must lessen the
intensity with which wealth is pursued. It seems to me
that in a condition of society in which no one need
fear poverty, no one would desire great wealth —
at least, no one would take the trouble to strive and
to strain for it as men do now. For, certainly, the
spectacle of men who have only a few years to live,
slaving away their time for the sake of dying rich, is
in itself so unnatural and absurd, that in a state of
society where the abolition of the fear of want had
dissipated the envious admiration with which the masses
of men now regard the possession of great riches,
whoever would toil to acquire more than he cared to use
would be looked upon as we would now look on a man who
would thatch his head with half a dozen hats.
And though this incentive to production be
withdrawn, can we not spare it? Whatever may have been
its office in an earlier stage of development, it is
not needed now. The dangers that menace our
civilization do not come from the weakness of the
springs of production. What it suffers from, and what,
if a remedy be not applied, it must die from, is
unequal distribution!
Nor would the removal of this incentive, regarded
only from the standpoint of production, be an unmixed
loss. For, that the aggregate of production is greatly
reduced by the greed with which riches are pursued, is
one of the most obtrusive facts of modern society.
While, were this insane desire to get rich at any cost
lessened, mental activities now devoted to scraping
together riches would be translated into far higher
spheres of usefulness. ...
read the whole chapter
The truth to which we were led in the
politico-economic branch of our inquiry is as clearly
apparent in the rise and fall of nations and the growth
and decay of civilizations, and it accords with those
deep-seated recognitions of relation and sequence that
we denominate moral perceptions. Thus are given to our
conclusions the greatest certitude and highest
sanction.
This truth involves both a menace and a promise. It
shows that the evils arising from the unjust and
unequal distribution of wealth, which are becoming more
and more apparent as modern civilization goes on, are
not incidents of progress, but tendencies which must
bring progress to a halt; that they will not cure
themselves, but, on the contrary, must, unless their
cause is removed, grow greater and greater, until they
sweep us back into barbarism by the road every previous
civilization has trod. But it also shows that these
evils are not imposed by natural laws; that they spring
solely from social maladjustments which ignore natural
laws, and that in removing their cause we shall be
giving an enormous impetus to progress.
The poverty which in the midst of abundance pinches
and embrutes men, and all the manifold evils which flow
from it, spring from a denial of justice. In permitting
the monopolization of the opportunities which nature
freely offers to all, we have ignored the fundamental
law of justice — for, so far as we can see, when
we view things upon a large scale, justice seems to be
the supreme law of the universe. But by sweeping away
this injustice and asserting the rights of all men to
natural opportunities, we shall conform ourselves to
the law —
-
we shall remove the great cause of unnatural
inequality in the distribution of wealth and
power;
-
we shall abolish poverty;
-
tame the ruthless passions of greed;
-
dry up the springs of vice and misery;
-
light in dark places the lamp of knowledge;
-
give new vigor to invention and a fresh impulse
to discovery;
-
substitute political strength for political
weakness; and
-
make tyranny and anarchy impossible.
The reform I have proposed accords with all that is
politically, socially, or morally desirable. It has the
qualities of a true reform, for it will make all other
reforms easier. What is it but the carrying out in
letter and spirit of the truth enunciated in the
Declaration of Independence — the "self-evident"
truth that is the heart and soul of the Declaration
—"That all men are created equal; that they are
endowed by their Creator with certain inalienable
rights; that among these are life, liberty, and the
pursuit of happiness!"
These rights are denied when the equal right to land
— on which and by which men alone can live
— is denied. Equality of political rights will
not compensate for the denial of the equal right to the
bounty of nature. Political liberty, when the equal
right to land is denied, becomes, as population
increases and invention goes on, merely the liberty to
compete for employment at starvation wages. ...
Our primary social adjustment is a denial of
justice. In allowing one man to own the land on which
and from which other men must live, we have made them
his bondsmen in a degree which increases as material
progress goes on. This is the subtle alchemy that in
ways they do not realize is extracting from the masses
in every civilized country the fruits of their weary
toil; that is instituting a harder and more hopeless
slavery in place of that which has been destroyed; that
is bringing political despotism out of political
freedom, and must soon transmute democratic
institutions into anarchy.
It is this that turns the blessings of material
progress into a curse. It is this that crowds human
beings into noisome cellars and squalid tenement
houses; that fills prisons and brothels; that goads men
with want and consumes them with greed; that robs women
of the grace and beauty of perfect womanhood; that
takes from little children the joy and innocence of
life's morning.
Civilization so based cannot continue. The eternal
laws of the universe forbid it. Ruins of dead empires
testify, and the witness that is in every soul answers,
that it cannot be. It is something grander than
Benevolence, something more august than Charity —
it is Justice herself that demands of us to right this
wrong. Justice that will not be denied; that cannot be
put off — Justice that with the scales carries
the sword. Shall we ward the stroke with liturgies and
prayers? Shall we avert the decrees of immutable law by
raising churches when hungry infants moan and weary
mothers weep?
Though it may take the language of prayer, it is
blasphemy that attributes to the inscrutable decrees of
Providence the suffering and brutishness that come of
poverty; that turns with folded hands to the All-Father
and lays on Him the responsibility for the want and
crime of our great cities. We degrade the Everlasting.
We slander the Just One. A merciful man would have
better ordered the world; a just man would crush with
his foot such an ulcerous ant-hill! It is not the
Almighty, but we who are responsible for the vice and
misery that fester amid our civilization. The Creator
showers upon us his gifts — more than enough for
all. But like swine scrambling for food, we tread them
in the mire — tread them in the mire, while we
tear and rend each other!...
read the whole chapter
Henry George: Thou
Shalt Not Steal (1887 speech)
"Thou shalt not steal." That means, of course,
that we ourselves must not steal. But does it not also
mean that we must not suffer anybody else to steal if
we can help it?
"Thou shalt not steal." Does it not
also mean: "Thou shalt not suffer thyself or anybody else
to be stolen from?" If it does, then we, all of us, rich
and poor alike, are responsible for this social crime
that produces poverty. Not merely the people who
monopolize the land — they are not to blame above
anyone else, but we who permit them to monopolize land
are also parties to the theft. ... read the whole
article Henry George:
The Land
Question (1881)
A little Island or a little
World
IMAGINE an island girt with ocean; imagine a
little world swimming in space. Put on it, in
imagination, human beings. Let them divide the land,
share and share alike, as individual property. At
first, while population is sparse and industrial
processes rude and primitive, this will work well
enough.
Turn away the eyes of the mind for
a moment, let time pass, and look again. Some families
will have died out, some have greatly multiplied; on the
whole, population will have largely increased, and even
supposing there have been no important inventions or
improvements in the productive arts, the increase in
population, by causing the division of labor, will have
made industry more complex. During this time some of
these people will have been careless, generous,
improvident; some will have been thrifty and grasping.
Some of them will have devoted much of their powers to
thinking of how they themselves and the things they see
around them came to be, to inquiries and speculations as
to what there is in the universe beyond their little
island or their little world, to making poems, painting
pictures, or writing books; to noting the differences in
rocks and trees and shrubs and grasses; to classifying
beasts and birds and fishes and insects – to the
doing, in short, of all the many things which add so
largely to the sum of human knowledge and human
happiness, without much or any gain of wealth to the
doer. Others again will have devoted all their energies
to the extending of their possessions. What, then, shall
we see, land having been all this time treated as private
property? Clearly, we shall see that the primitive
equality has given way to inequality. Some will have very
much more than one of the original shares into which the
land was divided; very many will have no land at all.
Suppose that, in all things save this, our little island
or our little world is Utopia – that there are no
wars or robberies; that the government is absolutely pure
and taxes nominal; suppose, if you want to, any sort of a
currency; imagine, if you can imagine such a world or
island, that interest is utterly abolished; yet
inequality in the ownership of land will have produced
poverty and virtual slavery.
For the people we have supposed are
human beings – that is to say, in their physical
natures at least, they are animals who can live only on
land and by the aid of the products of land. They may
make machines which will enable them to float on the sea,
or perhaps to fly in the air, but to build and equip
these machines they must have land and the products of
land, and must constantly come back to land. Therefore
those who own the land must be the masters of the rest.
Thus, if one man has come to own all the land, he is
their absolute master even to life or death. If they can
live on the land only on his terms, then they can live
only on his terms, for without land they cannot live.
They are his absolute slaves, and so long as his
ownership is acknowledged, if they want to live, they
must do in everything as he wills.
If, however, the concentration of
landownership has not gone so far as to make one or a
very few men the owners of all the land – if there
are still so many landowners that there is competition
between them as well as between those who have only their
labor – then the terms on which these
non-landholders can live will seem more like free
contract. But it will not be free contract. Land can
yield no wealth without the application of labor; labor
can produce no wealth without land. These are the two
equally necessary factors of production. Yet, to say that
they are equally necessary factors of production is not
to say that, in the making of contracts as to how the
results of production are divided, the possessors of
these two meet on equal terms. For the nature of these
two factors is very different. Land is a natural element;
the human being must have his stomach filled every few
hours. Land can exist without labor, but labor cannot
exist without land. If I own a piece of land, I can let
it lie idle for a year or for years, and it will eat
nothing. But the laborer must eat every day, and his
family must eat. And so, in the making of terms between
them, the landowner has an immense advantage over the
laborer. It is on the side of the laborer that the
intense pressure of competition comes, for in his case it
is competition urged by hunger. And, further than this:
As population increases, as the competition for the use
of land becomes more and more intense, so are the owners
of land enabled to get for the use of their land a larger
and larger part of the wealth which labor exerted upon it
produces. That is to say, the value of land steadily
rises. Now, this steady rise in the value of land brings
about a confident expectation of future increase of
value, which produces among landowners all the effects of
a combination to hold for higher prices. Thus there is a
constant tendency to force mere laborers to take less and
less or to give more and more (put it which way you
please, it amounts to the same thing) of the products of
their work for the opportunity to work. And thus, in the
very nature of things, we should see on our little island
or our little world that, after a time had passed, some
of the people would be able to take and enjoy a
superabundance of all the fruits of labor without doing
any labor at all, while others would be forced to work
the livelong day for a pitiful living.
But let us introduce another
element into the supposition. Let us suppose great
discoveries and inventions – such as the
steam-engine, the power-loom, the Bessemer process, the
reaping-machine, and the thousand and one labor-saving
devices that are such a marked feature of our era. What
would be the result?
Manifestly, the effect of all such
discoveries and inventions is to increase the power of
labor in producing wealth – to enable the same
amount of wealth to be produced by less labor, or a
greater amount with the same labor. But none of them
lessen, or can lessen the necessity for land. Until we
can discover some way of making something out of nothing
– and that is so far beyond our powers as to be
absolutely unthinkable – there is no possible
discovery or invention which can lessen the dependence of
labor upon land. And, this being the case, the effect of
these labor-saving devices, land being the private
property of some, would simply be to increase the
proportion of the wealth produced that landowners could
demand for the use of their land. The ultimate effect of
these discoveries and inventions would be not to benefit
the laborer, but to make him more dependent.
And, since we are imagining
conditions, imagine laborsaving inventions to go to the
farthest imaginable point, that is to say, to perfection.
What then? Why then, the necessity for labor being done
away with, all the wealth that the land could produce
would go entire to the landowners. None of it whatever
could be claimed by any one else. For the laborers there
would be no use at all. If they continued to exist, it
would be merely as paupers on the bounty of the
landowners! ... read
the whole article Henry George:
The Wages of Labor
Nor can the State cure poverty by regulating
wages. It is as much beyond the power of the State to
regulate wages as it is to regulate the rates of
interest. Usury laws have been tried again and again,
but the only effect they have ever had has been to
increase what the poorer borrowers must pay, and for
the same reasons that all attempts to lower by
regulation the price of goods have always resulted
merely in increasing their price.
The general rate of wages is fixed
by the ease or difficulty with which labor can obtain
access to land, ranging from the full earnings of labor,
where land is free; to the least on which laborers can
live and reproduce, where land is fully
monopolised.... read the whole
article Henry George:
Concentrations of Wealth Harm
America
(excerpt from Social
Problems)
(1883)
The Evils of
Monopolists
Consider the important part in
building up fortunes which the increase of land values
has had, and is having, in the United States. This is,
of course, monopoly, pure and simple. When land
increases in value it does not mean that its owner has
added to the general wealth. The owner may never have
seen the land or done aught to improve it. He may, and
often does, live in a distant city or in another
country. Increase of land values
simply means that the owners, by virtue of their
appropriation of something that existed before man was,
have the power of taking a larger share of the wealth
produced by other people's labor.
Consider
- how much the monopolies created and the
advantages given to the unscrupulous by the tariff and
by our system of internal taxation --
- how much the railroad (a business in its
nature a monopoly), telegraph, gas, water and other
similar monopolies, have done to concentrate
wealth;
- how special rates, pools, combinations,
corners, stock-watering and stock-gambling, the
destructive use of wealth in driving off or buying off
opposition which the public must finally pay for, and
many other things which these will suggest, have
operated to build up large fortunes, and it will at
least appear that the unequal
distribution of wealth is due in great measure to sheer
spoliation;
- that the reason why those
who work hard get so little, while so many who work
little get so much, is, in very large measure, that the
earnings of the one class are, in one way or another,
filched away from them to swell the incomes of the
other.
That individuals are constantly
making their way from the ranks of those who get less
than their earnings to the ranks of those who get more
than their earnings, no more proves this state of things
right than the fact that merchant sailors were constantly
becoming pirates and participating in the profits of
piracy, would prove that piracy was right and that no
effort should be made to suppress it.
...
Read the entire
article
Arthur J. Ogilvy: A Colonist's Plea
for Land Nationalization (about 1890)
The increase of value in my land has arisen from the
execution of public works and increase of population,
causing an increased demand for the land; in other
words, it has arisen from the national progress; and I,
so far from aiding in this progress have actually
hindered it, by keeping my property locked up and so
forcing on intending producers to inferior or less
accessible lands; and by holding so much land back have
helped to make land so much scarcer, and, therefore, so
much dearer, and so have helped to increase the tribute
which industry has to pay to monopoly for the mere
privilege of exerting itself. ...
Whether the value of land and the value of the
improvements can be separated or not, they are quite
distinct elements, just as in a glass of grog, the
brandy is brandy and the water water, each with its own
distinctive properties and effects, notwithstanding
their indistinguishable com-mixture; and he therefore
who lets land levies blackmail upon industry by
charging for something which represents no service at
all, none the less that at the same time he charges for
something else that does represent service.
No doubt there are many other things besides land in
which a monopoly of the article will enable the
possessor to levy something resembling blackmail; but
there are points of difference that distinguish them
all from the pure and simple appropriation of land
monopoly. ...
No doubt there are many other things besides land in
which a monopoly of the article will enable the
possessor to levy something resembling blackmail; but
there are points of difference that distinguish them
all from the pure and simple appropriation of land
monopoly.
The first is that none of them excludes other people
from making a living or from making earnings to any
extent by other means than the article
monopolised.
If by a day's labour or by pure accident I find a
diamond, I may ask a price entirely disproportionate to
the value of my labour; but then the public need not
buy my diamond unless they like. My finding a diamond
does not prevent other people from looking for diamonds
with as much chance of finding them as I had, and, if
they don't think they are likely to find any by looking
for them they can go without, and be none the
worse.
But every piece of land appropriated shuts out so many
other people from that land, and as all the land
(practically speaking) is appropriated, or in one way
or another out of reach of the masses, they are at the
mercy of the landholders, and have no choice but either
to rent it from them as tenants or work for them as
labourers on the hardest terms to which competition can
drive them; which means that the landowner has the
power of appropriating the greater part of their
earnings in return for the mere permission to them to
earn anything.
Or suppose that, instead of finding a diamond, I buy
tin, and that next week the price goes up to double
here there is an additional distinction between my
gains and the land speculator's; for not only are the
public under no compulsion to buy tin (while they are
to rent land), and not only does tin represent the
results of labour, and so represent earnings (which
land does not), but the magnitude of my gain in most
cases represents compensation for great risk.
The earnings of farmers and of miners may average the
same, but the farmers' average is made up of pretty
equal profits all round, while the miners' average is
made up of a few big prizes and many blanks. And what
applies to the miner applies also to the speculator in
mining products. His occasional large profits represent
compensation for great risks, and is thus as much of
the nature of insurance as of profit.
No one would think of either mining or speculating in
mining products, unless the many blanks were
compensated by occasional large prizes. They are the
necessary inducements to engage in those callings, and
therefore fair earnings when they come. Land, however,
is not a speculation in this sense (though even if it
were, its profits would still be appropriation and not
earnings for reasons already given); it is a sure
investment in the sense that it is subject to no
extraordinary risks: to no more risks, that is, than
such as are inseparable from all human enterprise, even
the safest. ...
Under the system prevailing all over the civilised
world every country is appropriated by a
(comparatively) few owners.
What these owners do with the land is a matter the
State concerns itself very little about. Whether they
occupy and use it themselves, or let it to a tenant and
live in idleness on the fruits of his labour; whether
they cultivate it like a garden, making it yield
abundant wealth and maintain hundreds of families, or
leave it in a state of nature to carry sheep, excluding
the whole rising tide of population from the
opportunity of developing its boundless resources
because the sheep pay them rather better; whether they
open out the mineral treasures hidden in its depths or
lock them up by demanding such exorbitant royalties
that enterprise either will not attempt the work, or
attempts and fails; whether they construct factories
and build cities upon it, or turn out the whole
population and burn down their dwellings (as in the
Scottish Highlands) because a foreign millionaire
offers them a higher price for the privilege of turning
it into a wilderness to shoot deer in than the children
of the soil can give for the mere privilege of earning
a living; all these things the State regards as matters
of quite secondary consideration with which it is not
called upon to interpose, because that would be
interfering with the "sacred rights" of property.
...
As the landlord by virtue of his monopoly of the land
holds the applicant for it at his mercy, so the
applicant once in possession holds the labourer at his
mercy.
The competition was first for possession of the land,
it is now for employment on the land. The competition
is in the one case open and direct, in the other
disguised and indirect.
Labourers do not usually underbid each other for
employment as tenants overbid each other for
possession, but it comes to much the same thing as if
they did: The more numerous the labourers in proportion
to the work to be done the lower the wages, and vice
versa.
If the landlords were to divide their land into as many
pieces of equal value as there were applicants for it,
and were to offer these pieces separately, there would
be no competition to run rents up, and the landlord
would have to take what he could get for it a merely
nominal rent.
To make money by his monopoly he must keep up its
character as a monopoly; that is, he must offer his
land in a single block so to speak, and so compel
competition.
And just as the landlord forces rents up by offering
his whole land for one tenant's occupation, and so
setting all to compete for the privilege of being that
one, so the occupier in his turn forces wages down by
employing as few labourers as he can, and so setting
all to compete for the privilege of being among those
few.
The secret of his power over the labourer is the same
as that of his landlord over him. It is not in his
capital as is generally supposed, but in his getting
possession of more laud than he can use by his own
personal labour, and preventing other people from using
it by their personal labour, except for his
profit.
The landlord makes the occupier give him his money; the
occupier makes the labourer give him his work.
In so far as the occupier can keep his wage expenditure
below the general level by doing the same work with
fewer men, or paying them less wages, he can retain the
savings to himself; but in so far as he only succeeds
in keeping down the general cost of labour, he is only
keeping down the recognised cost of working the land,
and so increasing the value of land, and so raising
rent; and the result of his efforts (as a rule), is
only to keep down the general level, for all are
playing the same game, and any saving effected by one
is soon copied by all, and absorbed in a general
reduced cost of production, increasing the value of
land and raising rent. ...
Here is a farm, selected from the assessment roll of
this district as a fair sample of a so-called
agricultural farm consisting of 640 acres and rented at
£150. It keeps, I believe, at the outside, two men
at work the year round; any other applicants for
employment being dismissed with the formula, "No work
for you."
Two men to a whole square mile! And this on a farm
within 15 miles of the port of Hobart, and containing
hardly an acre unfit for cultivation.
All the produce that comes off this farm has to be
raised by the labour of these two men. and must realise
over and above their wages and keep and all collateral
working expenses, a surplus of rent, £150; rates
and taxes, £20; employer's profit (say),
£100; total £270; being a profit of £135
to each man. No man, in short, is allowed the
opportunity to earn a living on this square mile of
cultivable land unless he produces, over and above the
supply of his own modest wants, a net annual surplus of
£135 to hand over to somebody else.
If employment is restricted, it is land monopoly that
restricts it.
It is not that there is not abundance of land to use,
abundance of use to put it to, and abundance of profit
to be made from it, but that the tendency of monopoly
is to keep hungry mouths off rather than to take
willing hands on. It is naturally concerned only to get
as big a share as possible to itself, and is not
concerned whether other people have a chance to get a
share or not. ...
But it ought to be clear by this time that if all
existing landlords were swept away and all the land in
use confirmed absolutely upon the occupiers, things
would be no better than they are now.
For the evil that weighs upon society, hindering
progress, forcing down earnings, and making life to all
who have to live by work a struggle for existence is
the monopoly of the land; and whether it is A or B who
monopolises it, is of no consequence to anybody but A
and B.
Wherever one man is allowed to acquire more land than
he can use by his own labour for the purpose of
preventing other people from using it by their labour
except for his profit, that man is master of the
situation, and the class of which he is the
representative has the world at its feet. And whether
the monopolist turns his monopoly to account as an
occupying owner by working the labourers for his profit
directly, or as a nonoccupier by selling to somebody
else (called a tenant) for a yearly payment (called
rent) the privilege of working them, is a difference
not worth talking about. ... read the whole
paper.
Mark Twain Archimedes
"Give me whereon to stand", said Archimedes,
"and I will move the earth." The boast was a pretty
safe one, for he knew quite well that the standing
place was wanting, and always would be wanting. But
suppose he had moved the earth, what then? What benefit
would it have been to anybody?
... I know of a mechanical force more powerful than
anything the vaunting engineer of Syracuse ever dreamed
of. It is the force of land monopoly; it is a screw and
lever all in one; it will screw the last penny out of a
man's pocket, and bend everything on earth to its own
despotic will. Give me the private ownership of
all the land, and will I move the earth? No; but I will
do more. I will undertake to make
slaves of all the human beings on the face of it. Not
chattel slaves exactly, but slaves nevertheless.
Read the whole piece
" A. J. O." (probably Mark Twain) Slavery
... But I gain in other ways besides pecuniary
benefit. I have lost the stigma of being a slave
driver, and have, acquired instead the character of a
man of energy and enterprise, of justice and
benevolence. I am a "large employer of labour," to whom
the whole country, and the labourer especially, is
greatly indebted, and people say, "See the power of
capital! These poor labourers, having no capital, could
not use the land if they had it, so this great and
far-seeing man wisely refuses to let them have it, and
keeps it all for himself, but by providing them with
employment his capital saves them from pauperism, and
enables him to build up the wealth of the country, and
his own fortune together."
Whereas it is not my capital that does any of
these things. It is not my capital but the
labourer’s toil that builds up my fortune and the
wealth of the country. It is not my employment that
keeps him from pauperism, but my monopoly of the land
forcing him into my employment that keeps him on the
brink of it. It is not want of capital that keeps the
labourer from using the land, but my refusing him the
use of the land that prevents him from acquiring
capital. All the capital he wants to begin with is an
axe and a spade, which a week’s earnings would
buy him, and for his maintenance during the first year,
and at any subsequent time, he could work for me or for
others, turnabout, with his work on his own land.
Henceforth with every year his capital would grow of
itself, and his independence with it, and that this is
no fancy sketch, anyone can see for himself by taking a
trip into the country, where he will find well-to-do
farmers who began with nothing but a spade and an axe
(so to speak) and worked their way up in the manner
described.
Enter the
landlord
But now another thought strikes me.
Instead of paying an overseer to work these men for me, I
will make him pay me for the privilege of doing it. I
will let the land as it stands to him or to another
– to whomsoever will give the most for the billet.
He shall be called my tenant instead of my overseer, but
the things he shall do for me are essentially the same,
only done by contract instead of for yearly pay. He, not
I, shall find all the capital, take all the risk, and
engage and supervise the men, paying me a lump sum,
called rent, out of the proceeds of their toil, and make
what he can for himself out of the surplus. The
competition is as keen in its way for the land, among
people of his class, as it is among the labourers for
employment, only that as they are all possessed of some
little means (else they could not compete) they are in no
danger of immediate want, and can stand out for rather
better terms than the labourers, who are forced by
necessity to take what terms they can get. The minimum in
each case amounts practically to a "mere living", but the
mere living they insist on is one of a rather higher
standard than the labourers’; it means a rather
more abundant supply and better quality of those little
comforts which are next door to necessaries. It means, in
short, a living of a kind to which people of that class
are accustomed.
For a moderate reduction in my
profits, then – a reduction equal to the
tenant’s narrow margin of profit – I have all
the toil and worry of management taken off my hands, and
the risk too, for be the season good or bad, the rent is
bound to be forthcoming, and I can sell him up to the
last rag if he fails of the full amount, no matter for
what reason; and my rent takes precedence of all other
debts. All my capital is set free for investment
elsewhere, and I am freed from the odium of a slave
owner, notwithstanding that the men still toil for my
enrichment as when they were slaves, and that I get more
out of them than ever. If I wax rich while they toil from
hand to mouth, and in depressed seasons find it hard to
get work at all; it is not, to all appearances, my doing,
but merely the force of circumstances, the law of nature,
the state of the labour market – fine sounding
names that hide the ugly reality.
If wages are forced down it is not
I that do it; it is that greedy and merciless man the
employer (my tenant) who does it. I am a lofty and
superior being, dwelling apart and above such sordid
considerations. I would never dream of grinding these
poor labourers, not I! I have nothing to do with them at
all; I only want my rent -- and get it. Like the lilies
of the field, I toil not, neither do I spin, and yet (so
kind is Providence!) my daily bread (well buttered) comes
to me of itself. Nay, people bid against each other for
the privilege of finding it for me; and no one seems to
realise that the comfortable income that falls to me like
the refreshing dew is dew indeed; but it is the dew of
sweat wrung from the labourers’ toil. It is the
fruit of their labour which they ought to have; which
they would have if I did not take it from
them.
This sketch illustrates the fact
that chattel slavery is not the only nor even the worst
form of bondage. When the use of the earth – the
sole source of our daily bread – is denied unless
one pays a fellow creature for permission to use it,
people are bereft of economic freedom. The only way to
regain that freedom is to collect the rent of land
instead of taxes for the public domain.
Once upon a time, labour leaders in
the USA, the UK and Australia understood these facts. The
labour movements of those countries were filled with
people who fought for the principles of ‘the single
tax’ on land at the turn of the twentieth century.
But since then and they have gradually yielded to the
forces of privilege and power daring no longer to come to
grips with this fundamental question, lest they, too,
become ridiculed. And so the world continues to wallow in
this particular ignorance – and in its ensuing
poverty and debt. Read the
whole piece
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts
(1894)
Note 57: While in the Pennsylvania coal regions a
few years ago I was told of an incident that
illustrates the power of perpetuating poverty which
resides in the absolute ownership of land.
The miners were in poverty. Despite the lavish
protection bestowed upon them by tariff laws at the
solicitation of monopolies which dictate our tariff
policy, the men were afflicted with poverty in many
forms. They were poor as to clothing, poor as to
shelter, poor as to food, and to be more specific, they
were in extreme poverty as to ice. When the summer
months came they lacked this thing because they could
not afford to buy, and they suffered.
Owing to the undermining of the ground and the
caving in of the surface here and there, there were
great holes into which the snow and the rain fell in
winter and froze, forming a passable quality of ice.
Now it is frequently said that intelligence, industry,
and thrift will abolish poverty. But these virtues were
not successful among the men of whom I speak. They were
intelligent enough to see that this ice if they saved
it would abolish their poverty as to ice, and they were
industrious enough and thrifty enough not only to be
willing to save it, but actually to begin the work.
Preparing little caves to preserve the ice in, they
went into the holes after a long day's work in the
mines, and gathered what so far as the need of ice was
concerned was to abolish their poverty in the ensuing
summer. But the owner of this part of the earth —
a man who had neither made the earth, nor the rain, nor
the snow, nor the ice, nor even the hole —
telegraphed his agent forbidding the removal of ice
except upon payment of a certain sum per ton.
The miners couldn't afford the condition. They
controlled the necessary Labor, and were willing to
give it to abolish their poverty; but the Land was
placed beyond their reach by an owner, and in
consequence of that, and not from any lack of
intelligence, industry, or thrift on their own part,
their poverty as to ice was perpetuated. ...
d. Effect of Confiscating Rent to
Private Use.
By giving Rent to individuals society ignores this
most just law, 99 thereby creating social disorder and
inviting social disease. Upon society alone, therefore,
and not upon divine Providence which has provided
bountifully, nor upon the disinherited poor, rests the
responsibility for poverty and fear of poverty.
99. "Whatever dispute arouses the
passions of men, the conflict is sure to rage, not so
much as to the question 'Is it wise?' as to the
question 'Is it right?'
"This tendency of popular discussions
to take an ethical form has a cause. It springs from
a law of the human mind; it rests upon a vague and
instinctive recognition of what is probably the
deepest truth we can grasp. That alone is wise which
is just; that alone is enduring which is right. In
the narrow scale of individual actions and individual
life this truth may be often obscured, but in the
wider field of national life it everywhere stands
out.
"I bow to this arbitrament, and accept
this test." — Progress and Poverty, book vii,
ch. i.
The reader who has been deceived into
believing that Mr. George's proposition is in any
respect unjust, will find profit in a perusal of the
entire chapter from which the foregoing extract is
taken.
Let us try to trace the connection by means of a
chart, beginning with the white spaces on page 68. As
before, the first-comers take possession of the best
land. But instead of leaving for others what they do
not themselves need for use, as in the previous
illustrations, they appropriate the whole space, using
only part, but claiming ownership of the rest. We may
distinguish the used part with red color, and that
which is appropriated without use with blue. Thus:
[chart]
But what motive is there for appropriating more of
the space than is used? Simply that the appropriators
may secure the pecuniary benefit of future social
growth. What will enable them to secure that? Our
system of confiscating Rent from the community that
earns it, and giving it to land-owners who, as such,
earn nothing.100
100. It is reported from Iowa that a
few years ago a workman in that State saw a meteorite
fall, and. securing possession of it after much
digging, he was offered $105 by a college for his
"find." But the owner of the land on which the
meteorite fell claimed the money, and the two went to
law about it. After an appeal to the highest court of
the State, it was finally decided that neither by
right of discovery, nor by right of labor, could the
workman have the money, because the title to the
meteorite was in the man who owned the land upon
which it fell.
Observe the effect now upon Rent and Wages. When
other men come, instead of finding half of the best
land still common and free, as in the corresponding
chart on page 68, they find all of it owned, and are
obliged either to go upon poorer land or to buy or rent
from owners of the best. How much will they pay for the
best? Not more than 1, if they want it for use and not
to hold for a higher price in the future, for that
represents the full difference between its
productiveness and the productiveness of the next best.
But if the first-comers, reasoning that the next best
land will soon be scarce and theirs will then rise in
value, refuse to sell or to rent at that valuation, the
newcomers must resort to land of the second grade,
though the best be as yet only partly used.
Consequently land of the first grade commands Rent
before it otherwise would.
As the sellers' price, under these circumstances, is
arbitrary it cannot be stated in the chart; but the
buyers' price is limited by the superiority of the best
land over that which can be had for nothing, and the
chart may be made to show it: [chart]
And now, owing to the success of the appropriators
of the best land in securing more than their fellows
for the same expenditure of labor force, a rush is made
for unappropriated land. It is not to use it that it is
wanted, but to enable its appropriators to put Rent
into their own pockets as soon as growing demand for
land makes it valuable.101 We may, for illustration,
suppose that all the remainder of the second space and
the whole of the third are thus appropriated, and note
the effect: [chart]
At this point Rent does not increase nor Wages fall,
because there is no increased demand for land for use.
The holding of inferior land for higher prices, when
demand for use is at a standstill, is like owning lots
in the moon — entertaining, perhaps, but not
profitable. But let more land be needed for use, and
matters promptly assume a different appearance. The new
labor must either go to the space that yields but 1, or
buy or rent from owners of better grades, or hire out.
The effect would be the same in any case. Nobody for
the given expenditure of labor force would get more
than 1; the surplus of products would go to landowners
as Rent, either directly in rent payments, or
indirectly through lower Wages. Thus: [chart]
101. The text speaks of Rent only as a
periodical or continuous payment — what would
be called "ground rent." But actual or potential Rent
may always be, and frequently is, capitalized for the
purpose of selling the right to enjoy it, and it is
to selling value that we usually refer when dealing
in land.
Land which has the power of yielding
Rent to its owner will have a selling value, whether
it be used or not, and whether Rent is actually
derived from it or not. This selling value will be
the capitalization of its present or prospective
power of producing Rent. In fact, much the larger
proportion of laud that has a selling value is wholly
or partly unused, producing no Rent at all, or less
than it would if fully used. This condition is
expressed in the chart by the blue color.
"The capitalized value of land is the
actuarial 'discounted' value of all the net incomes
which it is likely to afford, allowance being made on
the one hand for all incidental expenses, including
those of collecting the rents, and on the other for
its mineral wealth, its capabilities of development
for any kind of business, and its advantages,
material, social, and aesthetic, for the purposes of
residence." — Marshall's Prin., book vi, ch.
ix, sec. 9.
"The value of land is commonly
expressed as a certain number of times the current
money rental, or in other words, a certain 'number of
years' purchase' of that rental; and other things
being equal, it will be the higher the more important
these direct gratifications are, as well as the
greater the chance that they and the money income
afforded by the land will rise." — Id.,
note.
"Value . . . means not utility, not
any quality inhering in the thing itself, but a
quality which gives to the possession of a thing the
power of obtaining other things, in return for it or
for its use. . . Value in this sense — the
usual sense — is purely relative. It exists
from and is measured by the power of obtaining things
for things by exchanging them. . . Utility is
necessary to value, for nothing can be valuable
unless it has the quality of gratifying some physical
or mental desire of man, though it be but a fancy or
whim. But utility of itself does not give value. . .
If we ask ourselves the reason of . . . variations in
. . . value . . . we see that things having some form
of utility or desirability, are valuable or not
valuable, as they are hard or easy to get. And if we
ask further, we may see that with most of the things
that have value this difficulty or ease of getting
them, which determines value, depends on the amount
of labor which must be expended in producing them ;
i.e., bringing them into the place, form and
condition in which they are desired. . . Value is
simply an expression of the labor required for the
production of such a thing. But there are some things
as to which this is not so clear. Land is not
produced by labor, yet land, irrespective of any
improvements that labor has made on it, often has
value. . . Yet a little examination will show that
such facts are but exemplifications of the general
principle, just as the rise of a balloon and the fall
of a stone both exemplify the universal law of
gravitation. . . The value of everything produced by
labor, from a pound of chalk or a paper of pins to
the elaborate structure and appurtenances of a
first-class ocean steamer, is resolvable on analysis
into an equivalent of the labor required to produce
such a thing in form and place; while the value of
things not produced by labor, but nevertheless
susceptible of ownership, is in the same way
resolvable into an equivalent of the labor which the
ownership of such a thing enables the owner to obtain
or save." —
Perplexed Philosopher, ch. v.
The figure 1 in parenthesis, as an item of Rent,
indicates potential Rent. Labor would give that much
for the privilege of using the space, but the owners
hold out for better terms; therefore neither Rent nor
Wages is actually produced, though but for this both
might be.
In this chart, notwithstanding that but little space
is used, indicated with red, Wages are reduced to the
same low point by the mere appropriation of space,
indicated with blue, that they would reach if all the
space above the poorest were fully used. It thereby
appears that under a system which confiscates Rent to
private uses, the demand for land for speculative
purposes becomes so great that Wages fall to a minimum
long before they would if land were appropriated only
for use.
In illustrating the effect of confiscating Rent to
private use we have as yet ignored the element of
social growth. Let us now assume as before (page 73),
that social growth increases the productive power of
the given expenditure of labor force to 100 when
applied to the best land, 50 when applied to the next
best, 10 to the next, 3 to the next, and 1 to the
poorest. Labor would not be benefited now, as it
appeared to be when on page 73 we illustrated the
appropriation of land for use only, although much less
land is actually used. The prizes which expectation of
future social growth dangles before men as the rewards
of owning land, would raise demand so as to make it
more than ever difficult to get land. All of the fourth
grade would be taken up in expectation of future
demand; and "surplus labor" would be crowded out to the
open space that originally yielded nothing, but which
in consequence of increased labor power now yields as
much as the poorest closed space originally yielded,
namely, 1 to the given expenditure of labor force.102
Wages would then be reduced to the present
productiveness of the open space. Thus: [chart]
102. The paradise to which the youth
of our country have so long been directed in the
advice, "Go West, young man, go West," is truthfully
described in "Progress and Poverty," book iv, ch. iv,
as follows :
"The man who sets out from the
eastern seaboard in search of the margin of
cultivation, where he may obtain land without
paying rent, must, like the man who swam the river
to get a drink, pass for long distances through
half-titled farms, and traverse vast areas of
virgin soil, before he reaches the point where land
can be had free of rent — i.e., by homestead
entry or preemption."
If we assume that 1 for the given expenditure of
labor force is the least that labor can take while
exerting the same force, the downward movement of Wages
will be here held in equilibrium. They cannot fall
below 1; but neither can they rise above it, no matter
how much productive power may increase, so long as it
pays to hold land for higher values. Some laborers
would continually be pushed back to land which
increased productive power would have brought up in
productiveness from 0 to 1, and by perpetual
competition for work would so regulate the labor market
that the given expenditure of labor force, however much
it produced, could nowhere secure more than 1 in
Wages.103 And this tendency would persist until some
labor was forced upon land which, despite increase in
productive power, would not yield the accustomed living
without increase of labor force. Competition for work
would then compel all laborers to increase their
expenditure of labor force, and to do it over and over
again as progress went on and lower and lower grades of
land were monopolized, until human endurance could go
no further.104 Either that, or they would be obliged to
adapt themselves to a lower scale of living.105
103. Henry Fawcett, in his work on
"Political Economy," book ii, ch. iii, observes with
reference to improvements in agricultural implements
which diminish the expense of cultivation, that they
do not increase the profits of the farmer or the
wages of his laborers, but that "the landlord will
receive in addition to the rent already paid to him,
all that is saved in the expense of cultivation."
This is true not alone of improvements in
agriculture, but also of improvements in all other
branches of industry.
104. "The cause which limits
speculation in commodities, the tendency of
increasing price to draw forth additional supplies,
cannot limit the speculative advance in land values,
as land is a fixed quantity, which human agency can
neither increase nor diminish; but there is
nevertheless a limit to the price of land, in the
minimum required by labor and capital as the
condition of engaging in production. If it were
possible to continuously reduce wages until zero were
reached, it would be possible to continuously
increase rent until it swallowed up the whole
produce. But as wages cannot be permanently reduced
below the point at which laborers will consent to
work and reproduce, nor interest below the point at
which capital will be devoted to production, there is
a limit which restrains the speculative advance of
rent. Hence, speculation cannot have the same scope
to advance rent in countries where wages and interest
are already near the minimum, as in countries where
they are considerably above it. Yet that there is in
all progressive countries a constant tendency in the
speculative advance of rent to overpass the limit
where production would cease, is, I think, shown by
recurring seasons of industrial paralysis." —
Progress and Poverty, book iv, ch. iv.
105. As Puck once put it, "the man who
makes two blades of grass to grow where but one grew
before, must not be surprised when ordered to 'keep
off the grass.' "
They in fact do both, and the incidental
disturbances of general readjustment are what we call
"hard times." 106 These culminate in forcing unused
land into the market, thereby reducing Rent and
reviving industry. Thus increase of labor force, a
lowering of the scale of living, and depression of
Rent, co-operate to bring on what we call "good times."
But no sooner do "good times" return than renewed
demands for land set in, Rent rises again, Wages fall
again, and "hard times" duly reappear. The end of every
period of "hard times" finds Rent higher and Wages
lower than at the end of the previous period.107
106. "That a speculative advance in
rent or land values invariably precedes each of these
seasons of industrial depression is everywhere clear.
That they bear to each other the relation of cause
and effect, is obvious to whoever considers the
necessary relation between land and labor." —
Progress and Poverty, book v, ch. i.
107. What are called "good times"
reach a point at which an upward land market sets in.
From that point there is a downward tendency of wages
(or a rise in the cost of living, which is the same
thing) in all departments of labor and with all
grades of laborers. This tendency continues until the
fictitious values of land give way. So long as the
tendency is felt only by that class which is hired
for wages, it is poverty merely; when the same
tendency is felt by the class of labor that is
distinguished as "the business interests of the
country," it is "hard times." And "hard times" are
periodical because land values, by falling, allow
"good times" to set it, and by rising with "good
times" bring "hard times" on again. The effect of
"hard times" may be overcome, without much, if any,
fall in land values, by sufficient increase in
productive power to overtake the fictitious value of
land.
The dishonest and disorderly system under which
society confiscates Rent from common to individual
uses, produces this result. That maladjustment is the
fundamental cause of poverty. And progress, so long as
the maladjustment continues, instead of tending to
remove poverty as naturally it should, actually
generates and intensifies it. Poverty persists with
increase of productive power because land values, when
Rent is privately appropriated, tend to even greater
increase. There can be but one outcome if this
continues: for individuals suffering and degradation,
and for society destruction.
Q35. What would be the effect of the single tax
if you still left railroad, telegraph, money, and other
monopolies in private hands?
A. The real strength of all monopolies is in land
monopoly. Observe, for example, the land holdings of
the inside ring of such railroads as the Southern
Pacific, to which the interests of the road are
corruptly made subordinate. Abolish land monopoly, and
the power of all the others will go, as Sampson's
strength went with the cutting of his hair. ...
read the
book
Charles B. Fillebrown: A Catechism of Natural
Taxation, from Principles of Natural
Taxation (1917)
Q28. How are landlords privileged?
A. Because, in so far as their land tax is an "old"
tax, it is a burdenless tax, and because their
buildings' tax is shifted upon their tenants; most
landlords who let land and also the tenement houses and
business blocks thereon avoid all share in the tax
burden.
... read
the whole article
Winston Churchill: Land Price as a Cause of
Poverty (1909 speech in Parliament)
... I do not think the Leader
of the Opposition could have chosen a more unfortunate
example than Glasgow. He said that the demand of that
great community for land was for not more than forty
acres a year. Is that the only demand of the people of
Glasgow for land? Does that really represent the
complete economic and natural demand for the amount of
land a population of that size requires to live on? I
will admit that at present prices it may be all that
they can afford to purchase in the course of a year.
But there are one hundred and twenty thousand persons
in Glasgow who are living in one-room tenements; and we
are told that the utmost land those people can absorb
economically and naturally is forty acres a
year.
What is the explanation? Because
the population is congested in the city the price of land
is high upon the suburbs, and because the price of land
is high upon the suburbs the population must remain
congested within the city. That is the position which we
are complacently assured is in accordance with the
principles which have hitherto dominated civilised
society.
But when we seek to rectify this
system, to break down this unnatural and vicious circle,
to interrupt this sequence of unsatisfactory reactions,
what happens? We are not confronted with any great
argument on behalf of the owner. Something else is put
forward, and it is always put forward in these cases to
shield the actual landowner or the actual capitalist from
the logic of the argument or from the force of a
Parliamentary movement.
Sometimes it is the widow. But that personality has been used
to exhaustion. It would be sweating in the cruellest
sense of the word, overtime of the grossest description,
to bring the widow out again so soon. She must have a
rest for a bit; so instead of the widow we have
the market-gardener -- the
market-gardener liable to be disturbed on the outskirts
of great cities, if the population of those cities
expands, if the area which they require for their health
and daily life should become larger than it is at
present.
What is the position disclosed by the argument?
On the one hand, we have one hundred and twenty
thousand persons in Glasgow occupying one-room
tenements; on the other, the land of Scotland. Between
the two stands the market-gardener, and we are solemnly
invited, for the sake of the market-gardener, to keep
that great population congested within limits that are
unnatural and restricted to an annual supply of land
which can bear no relation whatever to their physical,
social, and economic needs -- and all for the sake of
the market-gardener, who can perfectly well move
farther out as the city spreads and who would not
really be in the least injured. ...
Read the whole
piece
Clarence Darrow: How to Abolish
Unfair Taxation (1913)
Everybody nowadays is anxious to help do something for
the poor, especially they who are on the backs of the
poor; they will do anything that is not fundamental.
Nobody ever dreams of giving the poor a chance to help
themselves. The reformers in this state have passed a
law prohibiting women from working more than eight
hours in one day in certain industries — so much
do women love to work that they must be stopped by law.
If any benevolent heathen see fit to come here and do
work, we send them to gaol or send them back where they
came from.
All these prohibitory laws are froth. You can only cure
effects by curing the cause. Every sin and every wrong
that exists in the world is the product of law, and you
cannot cure it without curing the cause. Lawyers, as a
class, are very stupid. What would you think of a
doctor, who, finding a case of malaria, instead of
draining the swamp, would send the patient to gaol, and
leave the swamp where it is? We are seeking to improve
conditions of life by improving symptoms.
Land Basic
No man created the earth, but to a large extent all
take from the earth a portion of it and mould it into
useful things for the use of man. Without land man
cannot live; without access to it man cannot labor.
First of all, he must have the earth, and this he
cannot have access to until the single tax is applied.
It has been proven by the history of the human race
that the single tax does work, and that it will work as
its advocates claim. For instance, man turned from
Europe, filled with a population of the poor, and
discovered the great continent of America. Here, when
he could not get profitable employment, he went on the
free land and worked for himself, and in those early
days there were no problems of poverty, no wonderfully
rich and no extremely poor — because there was
cheap land. Men could go to work for themselves, and
thus take the surplus off the labor market. There were
no beggars in the early days. It was only when the
landlord got in his work — when the earth
monopoly was complete — that the great mass of
men had to look to a boss for a job.
All the remedial laws on earth can scarcely
help the poor when the earth is monopolized. Men must
live from the earth, they must till the soil, dig the
coal and iron and cut down the forest. Wise men know
it, and cunning men know it, and so a few have reached
out their hands and grasped the earth; and they say,
"These mines of coal and iron, which it took nature
ages and ages to store, belong to me; and no man can
touch them until he sees fit to pay the tribute I
demand." ... read the whole
speech
About this matter of wages, George had had other
testimony besides the old printer’s. On his way
to Oregon a dozen years before, he fell in with a lot
of miners who were talking about the Chinese, and
ventured to ask what harm the Chinese were doing as
long as they worked only the cheap diggings. “No
harm now,” one of the miners said, “but
wages will not always be as high as they are today in
California. As the
country grows, as people come in, wages will go
down, and some day or other white people will be
glad to get those diggings that the Chinamen are
working.” George said that this idea, coming on
top of what the printer had said, made a great
impression on him — the idea that “ as the country grew in all that we are
hoping that it might grow, the condition of those
who had to work for their living must become, not
better, but worse.” Yet in the short space of a
dozen years this was precisely what was taking place
before his own eyes.
Still, though his two great questions became more and
more pressing, he could not answer them. His thought
was still inchoate. He went around and around his
ultimate answer, like somebody fumbling after something
on a table in the dark, often actually touching it
without being aware that it was what he was after.
Finally it came to him in a burst of true Cromwellian
or Pauline drama out of “the commonplace reply of
a passing teamster to a commonplace question.”
One day in 1871 he went for a horseback ride, and as he
stopped to rest his horse on a rise overlooking San
Francisco Bay —
“I asked a passing teamster, for want of
something better to say, what land was worth there.
He pointed to some cows grazing so far off that they
looked like mice, and said, ’I don’t know
exactly, but there is a man over there who will sell
some land for a thousand dollars an acre.’ Like
a flash it came over me that there was the reason of
advancing poverty with advancing wealth. With the growth of
population, land grows in value, and the men who
work it must pay more for the privilege.”
Yes, there it was. Why had wages suddenly shot up so
high in California in 1849 that cooks in the
restaurants of San Francisco got $500 a month? The
reason now was simple and clear. It was because the
placer mines were found on land that did not belong to
anybody. Any one could go to them and work them
without having to pay an owner for the privilege. If
the lands had been owned by somebody, it would have
been land-values instead of wages that would have so
suddenly shot up.
Exactly this was what had taken place on these grazing
lands overlooking San Francisco Bay. The Central
Pacific meant to make its terminus at Oakland, the
increased population would need the land around Oakland
to settle on, and land values had jumped up to a
thousand dollars an acre. Naturally, then, George
reasoned, the more public improvements there were, the
better the transportation facilities, the larger the
population, the more industry and commerce — the
more of everything that makes for
“prosperity” — the more would land
values tend to rise, and the more would wages and
interest tend to fall.
George rode home thoughtful, translating the
teamster’s commonplace reply into the technical
terms of economics. He reasoned that there are three factors in the
production of wealth, and only three: natural
resources, labor, and capital. When natural resources
are unappropriated, obviously the whole yield of
production is divided into wages, which go to labor,
and interest, which goes to capital. But when they are
appropriated, production has to carry a third charge
— rent. Moreover, wages
and interest, when there is no rent, are regulated
strictly by free competition; but rent is a
monopoly-charge, and hence is always “all the
traffic will bear.”
Well, then, since natural resource values
are purely social in their origin, created by the
community, should not rent go to the community rather
than to the Individual? Why tax
industry and enterprise at all — why not just
charge rent? There would be no need to interfere with
the private ownership of natural resources. Let a man
own all of them he can get his hands on, and make as
much out of them as he may, untaxed; but let him pay
the community their annual rental value, determined
simply by what other people would be willing to pay for
the use of the same holdings. George could see
justification for wages and interest, on the ground of
natural right; and for private ownership of natural
resources, on the ground of public policy; but he could
see none for the private appropriation of economic
rent. In his view it was sheer theft. If he was right, then it also
followed that as long as economic rent remains
unconfiscated, the taxation of
industry and enterprise is pure highwaymanry,
especially tariff taxation,
for this virtually delegates the government’s
taxing power to private persons.
George worked out these ideas in a tentative way in a
forty-eight page pamphlet with the title,
“Our Land and Land Policy, National and
State,” which did not reach many readers,
but added something to his reputation as a tribune of
the people. The subject mulled in his mind through five
years of newspaper work, at the end of which he lost
his paper and was once more on the ragged edge. He had
begun a magazine article on the cause of industrial
depressions, but was dissatisfied with it — one
could do nothing with the topic in so little space.
What was needed was a solid treatise which should
recast the whole science of political economy.
He felt that he could write this treatise, but how were
he and his family to live meanwhile? He had used his
influence on the Democratic side in the last State
campaign, and had been particularly instrumental in
selecting the governor; so he wrote to Governor Irwin,
asking him “to give me a place where there was
little to do and something to get, so that I could
devote myself to some important writing.” The
governor gave him the State inspectorship of gas
meters, which was a moderately well-paid job, and a
sinecure. This was in January, 1876; and in March,
1879, he finished the manuscript of a book entitled
Progress and
Poverty: an Inquiry Into the Cause of Industrial
Depressions, and of Increase of Want With Increase of
Wealth; the Remedy. ... read the whole article
Go to the work of Henry George himself and learn how
many of the troubles from which society still suffers,
and suffers increasingly, are due to the fact that a
few have monopolized the land, and that in consequence
they have the power to dictate to others access to the
land and to its products -- which include waterpower,
electricity, coal, iron and all minerals, as well as
the foods that sustain life -- and that they have the
power to appropriate to their private use the values
that the industry, the civilized order, the very
benefactions, of others produce. This wrong is at the
very basis of our present social and economic chaos,
and until it is righted, all steps toward economic
recovery may be temporarily helpful while in the long
run useless. ... read
the whole speech
Karl Williams: Social
Justice In Australia: INTERMEDIATE KIT
There are defenders of capitalism who attack
Geonomics (Georgist economics) for being socialist.
Similarly, socialists and communists criticise
Geonomics for being capitalist - in fact, Marx called
Henry George "capitalism's last ditch". Who is
right?
"Capitalism" is a woolly word,
meaning different things to different people.
Geonomists wouldn't criticise capitalism per se, but
rather decry "land monopoly capitalism".
WHEN TOO MUCH IS BARELY
ENOUGH
Whatever is wrong with the acquisition of
capital? Who would not want to afford a roof over one's
head, adequate food and clothing, some means of
transportation, a decent education, and to go
travelling and see the world? I've put this question
innumerable times to self-declared opponents of
capitalism - many of them very well read - and have
never received any sort of adequate rebuttal. The
response is usually along the lines of: "Well, some
capital like that is OK, but nobody should have too
much capital". In the final analysis, "too much"
capital means any amount more than the
speaker's!
The flaw here, as we see it,
is that socialists do not make the vital distinction
between earned and unearned wealth when they attack the
owners of capital.
- Was this accumulated capital honestly earned
in a free and a fair market?
- Was there no monopolistic
privilege?
- Was there the creation of real wealth or was
there merely the gaining of speculative
profits?
NO WEALTH-ENVY FROM
US!
As we see it, if someone is a rich "capitalist"
who has accumulated a fortune, say, by being a great
inventor, author, sportsperson or a plain hard worker
who lives frugally, then "God bless him!" If they then
want to live in a big house and drive a big car, then
"Good luck to 'em!" They've provided services that
actually benefit society in a truly free and fair
market, and they'd pay their way in the form of LVT. We
need more such capitalists!
The other capitalists are a different kettle of
fish. Reaping where you don't sow is not in the
Geonomic bible, and the full retention of the economic
rent for the benefit of society would leave absolutely
nothing for the cigar-chomping, would-be robber barons.
But let's not forget the subtle forms of speculation
and unearned wealth as practiced even by well-meaning
citizens by speculating in one form or another.
Unfortunately, the "quick bucks" culture is not
promoted only in investment circles. Even the nightly
news promotes, and even glorifies, speculative profits
without ever questioning where the wealth comes
from. ...
Read the entire article
Karl Williams: Land Value Taxation: The
Overlooked But Vital Eco-Tax
I. Historical overview
II. The problem of sprawl
III. Affordable and efficient public
transport
IV. Agricultural benefits
V. Financial concerns
VI. Conclusion: A greater
perspective
Appendix: "Natural Capitalism" -- A Case Study
in Blindness to Land Value Taxation
LVT and its 19th-century champion, Henry
George, achieved huge acclaim before being buried
by the "purpose-built" body of neoclassical economics
financed largely by rent-seeking American
plutocrats.[18]
In one form or another, Henry George's writings on the
need to tax land values was preceded or endorsed by
various biblical prophets, and by Carlyle, Churchill,
Einstein, Franklin, Aldous Huxley, Jefferson, Lincoln,
Locke, J.S. Mill, Paine, Penn, Rousseau, Bertrand
Russell, Adam Smith, Spencer, Spinoza, Sun Yat Sen,
James Tobin, Tolstoy, Twain, Voltaire, Winstanley,
Frank Lloyd Wright and many more.[19] Just how this wisdom has been
lost sight of is a long - too long for this paper - and
tragic story.
Here, for this conference, is the quirk -
environmental considerations played
almost no part in the compelling endorsements lavished
on LVT! The main bill, then and now, is its powerful
explanation of the great causes of social injustice,
with the second billing going to an exposure of a whole
range of economic inefficiencies and deadweight losses
of our present economic system, which should more
accurately be termed land-monopoly capitalism.
Support acts include libertarian ideals (non-intrusive
tax systems), effective Third World Aid, an end to tax
evasion, contributions to world peace, and an end to
boom & bust cycles.
The appeal of LVT to some others is more its
philosophical basis and how its implementation must
turn the economy the right way up, such that the cause
of the "madness" (because completely unnecessary) of
involuntary unemployment is eliminated, which of
necessity then leads to the range of benefits just
mentioned.
This is not a meandering departure from the
subject of this conference. No significant, effectual
solutions can be made to our environment if the
all-embracing economic system is only nibbled at,
piecemeal, from the angle of taxation
alone.
LVT is not a mere taxation solution, but an
integrated economic solution, impacting on land
management and cutting at the heart of privilege and
injustice. Yes, environmental tax reformers must indeed
address the looting of undervalued natural resources
driven by bourgeois habits of overconsumption. Let us
not, however, overlook the destruction resulting from
short-term perspectives driven by poverty and
desperation. LVT deals with both worlds.
read
the entire article
Karl
Williams: Social Justice In Australia:
ADVANCED KIT
THE MENACE OF
MONOPOLY
Land effectively behaves as a monopoly good -
the rent is not determined by any cost of production,
for it is already the highest price that anyone will
offer for it. There is no substitute for the valuable
land that individuals and businesses need - one can't
go out into the desert and haul in prime real
estate!
The LVT would not somehow increase the
willingness of anyone to pay more for the land than
before, nor would it in any way add to the ability of
the owner to demand more. To suppose that LVT could be
just offloaded on tenants is to suppose that landowners
did not already get for their land all that it brought.
In other words, it supposes that, whenever they wanted
to, landowners could put up prices as they
please!
A PARADOX
Here's the paradoxical twist. As far as one can predict, LVT would - in a
country like Australia, with so much valuable unused
land - tend strongly to lower rents. Owners of unused
land who previously were holding out for higher prices
would now be driven by LVT to seek purchasers or
tenants, thereby having to lower the asking
price. And, for land which is being rented, the
landowner would have to forfeit part or all of his cut
to the government. However the selling price of land,
determined by net rents to the landowner, would
necessarily be much diminished (with full LVT
collection, the selling price would be around
zero).
Radical as Geonomics is, here - contrary to
appearances - we are not arguing about anything
contentious or new. It is generally conceded by
knowledgeable economists that the landlord cannot
transfer taxes levied upon rent to the tenant. It is
accepted that a tax upon anything of which the supply
is fixed or monopolised, and of which its cost of
production is not therefore a determining element
(since it has no effect in checking supply), does not
increase prices and falls entirely on the
owner. ... Read the
entire article
Bill Batt: The
Compatibility of Georgist Economics and Ecological
Economics
The justice in the Georgist tradition grows out
of the premise that one is entitled to what one makes
with one’s own hands or mind, but one is not
personally entitled to the gains that grow out of
communal efforts. Those are owed to and should be
returned to the community. The justice inherent in
ecological economics, to the extent that it has
solidified, involves a recognition that preservation of
natural capital is in the interest of everyone. Both
recognize and value the preservation of a world commons
in nature. Both appreciate the diversity preserved in
local community institutions and cultures. Both accept
models based on self-regulating assumptions — in
one case using the phrase “steady state”
economics, in the other case the recovery of land rent
in the pursuit of open and stable markets over monopoly
control. There is great promise in the confluence of
the two perspectives: they offer a solution to the
age-old challenge of resolving what in the world ought
to be public and common, and what else ought to be
individual and private. It remains now for proponents
of each perspective to continue exploring
commonalities.
Alternatives that have been tried in the
past, both classic capitalism and socialism, suggest
that neither has served the interests of humanity well
in the long term. Ecological economics has no theory of
property as such, and Georgism here offers a proven
course of application. To Georgists, ownership is
linked to use and not to freehold title. Holding
individual property under license of the community, and
under terms which the community stipulates, is an idea
with a long tradition, well accepted, and needing only
to be revived in contemporary political, legal and
economic discourse. Combined with the pricing device of
collecting land rent, ecological economics will have a
tool by which to circumscribe and even reverse the
centrifugal forces of a new economic imperialism. This
is truly the beginning of a “Third Way”
when other theories seem to be moribund. ... read the whole
article
Bill Batt: Who Says
Cities are Poor? They Just Don't Know How to Tax Their
Wealth!
One could argue that the failure to tax every bit of
economic rent that accretes to land sites also has
destructive consequences, although this is somewhat
open to debate. Classical economists agree that rent
collection ought to be at least the sum of inflation
plus interest, otherwise the public is facilitating
speculation in ways that distorts urban configurations
even more than they constitute an inequity. But land
sites frequently rise in market price far more than the
rate of inflation, especially in times (as is perhaps
true today) that a "bubble" in an economic cycle is in
full flower. Some municipalities, especially on the
east and west coasts of US, are today claiming to have
increases in housing prices of as high as 20 percent
per annum, a fever that surely will not last and will
be especially destructive when it
collapses.[19]
Land values are what create that bubble;
buildings are subject to continuing depreciation just
like cars, computers, refrigerators or any other
manufactured (capital) item. Recovering the economic
rent reduces and perhaps even eliminates the
speculative bubbles and swings that (some argue)
account for economic cycles, fostering stability and
regularity in economic planning and development that
make for improved financial health to all.
This reality brings into stark relief the choices which
local political leaders have. They may suggest
increasing taxes on economic rent (i.e., on land value)
or recognize that most property owners are counting on
treating their homes and other property not as places
to live and work so much as investments and then lament
the poverty of their cities. Owners expect to reap a
gain from their property when they sell, and they are
often positioned to make any threat to that entitlement
politically unpalatable. Farmers sometimes regard
selling their farms as their retirement security.
Homeowners sell with the expectation that this gain
will provide them the means to enter long term
end-of-life facilities if necessary. Heirs also oppose
that recapture just as with a reverse mortgage.
But for every long-term property owner that
walks away with a lifetime's benefit of increased rent
attached to a land title, there are just as many
— if not more — young households or
emerging businesses that are prohibited from acquiring
a property because of the prohibitively expensive
costs. In this sense, a title to a socially created
stream of rental benefits constitutes a monopoly
privilege to an unearned windfall gain for a lucky few.
It is both unjust and is socially and economically
destructive to the greater good. ... read the whole
article
Karl Williams:
Two Cow Economics
NEOCLASSICAL LAND-MONOPOLY
CAPITALIST
You have two cows and several hectares of land.
Your neighbour is a single mother, has no cows, no
land and works a part-time job.
You tell her that if she works longer and harder she
could buy one of your cows and become an enterprising
capitalist. So she takes on full-time work so that,
after 3 months, she has saved enough money to buy one
of your cows.
But what use is a cow (or anything, for that matter)
without a plot of your land, which is now worth
$20,000?
So your neighbour takes on a night shift in addition
to her day job, leaving for work after the kids are in
bed and arriving home just in time to get them dressed
for school.
After a year she has saved enough money to buy that
land.
Expressing great regret you explain that, in the
meantime, the taxes on her income have paid for the
infrastructure that have boosted the value of your
land, so that the current market price for that plot is
now worth $30,000. Back to the grindstone, baby!
Another year of sweat and toil follows, after which
she returns with the money. But, with hand on heart,
you break the news that economic circumstances have
recently driven most single and married mothers to
bring in an extra income in order to save for the
ever-escalating price of land. As no-one’s making
any more land, the greater number of bidders has pushed
up the price of the fixed amount of land (this is
called a “healthy, buoyant property
market”). It’s now worth $40,000 but it
would be a lot easier if she just got a bank loan, you
tell her. However, all those eager bidders for land
have also bid up the rate of interest they’re
prepared to suffer, so that interest rates are now
prohibitive. Your neighbour collapses in tears at your
feet, but what can you do? – you didn’t
invent the system! Just as our poor mum relents and
considers taking out a mortgage, she finally gets some
good news – in a surprise move, the Reserve Bank
has decided to make it easier on prospective
home-owners by reducing interest rates. However, this
has had the effect of making the owning of property
more attractive, so – immediately the interest
rate decision is announced – landowners raise the
selling price of land. The “fair market
price” of that plot is now $50,000.
However, under political pressure because of the
unaffordability of property, the federal government
announce that it will institute a First Home
Owners’ grant of $7,000. Suddenly that plot is
selling for $57,000.
GEOIST
You have two cows and several acres of land.
Your neighbour is a single mother, has no cows, no
land and works a minimum wage job.
You’ve had an amazing vision wherein you see
the geoist paradigm in all its glory and realise that
all other reforms are just band-aids, so you become an
activist with ProsperAustralia. You share your insight
with your neighbour and so everyone pulls together to
successfully reform our insane tax laws and system of
land tenure. As a result:
(1) your neighbour can keep all of her hard-earned
income, and
(2) those who have enclosed substantial amounts of the
Common Wealth for their own private domain now pay fair
land value taxation (LVT) to society.
Your LVT bill arrives and you realise you have been
holding more land than you really need, so auction off
the title to your land and the improvements on it.
Because of genuine tax relief, your neighbour can now
afford to buy the property.
And so - with LVT and trust and angel dust - they all
live happily ever after. ...
read the whole article
Thomas Flavin, writing in The
Iconoclast, 1897
Now, it is quite true that all taxes of whatever
nature are paid out of the products of labor. But must
they be for that reason a tax on labor products. Let us
see.
I suppose you won't deny that a unit of labor
applies to different kinds of land will give very
different results. Suppose that a unit of labor
produces on A's land 4, on B's 3, on C's 2 and on D's
1. A's land is the most, and D's is the least,
productive land in use in the community to which they
belong. B's and C's represent intermediate grades.
Suppose each occupies the best land that was open to
him when he entered into possession. Now, B, and C, and
D have just as good a right to the use of the best land
as A had.
Manifestly then, if this be the whole story, there
cannot be equality of opportunity where a unit of labor
produces such different results, all other things being
equal except the land.
How is this equality to be secured? There is but one
possible way. Each must surrender for the common use of
all, himself included, whatever advantages accrues to
him from the possession of land superior to that which
falls to the lot of him who occupies the poorest.
In the case stated, what the unit of labor produces
for D, is what it should produce for A, B and C, if
these are not to have an advantage of natural
opportunity over D.
Hence equity is secured when A pays 3, D, 2 and C, 1
into a common fund for the common use of all--to be
expended, say in digging a well, making a road or
bridge, building a school, or other public utility.
Is it not manifest that here the tax which A, B and
C pay into a common fund, and from which D is exempt,
is not a tax on their labor products (though paid out
of them) but a tax on the superior advantage which they
enjoy over D, and to which D has just as good a right
as any of them.
The result of this arrangement is that each takes up
as much of the best land open to him as he can put to
gainful use, and what he cannot so use he leaves open
for the next. Moreover, he is at no disadvantage with
the rest who have come in ahead of him, for they
provide for him, in proportion to their respective
advantages, those public utilities which invariably
arise wherever men live in communities. Of course he
will in turn hold to those who come later the same
relation that those who came earlier held to him.
Suppose now that taxes had been levied on labor
products instead of land; all that any land-holder
would have to do to avoid the tax is to produce little
or nothing. He could just squat on his land, neither
using it himself nor letting others use it, but he
would not stop at this, for he would grab to the last
acre all that he could possibly get hold of. Each of
the others would do the same in turn, with the sure
result that by and by, E, F and G would find no land
left for them on which they might make a living.
So they would have to hire their labor to those who
had already monopolized the land, or else buy or rent a
piece of land from them. Behold now the devil of
landlordism getting his hoof on God's handiwork! Exit
justice, freedom, social peace and plenty. Enter
robbery, slavery, social discontent, consuming grief,
riotous but unearned wealth, degrading pauperism, crime
breeding, want, the beggar's whine, and the tyrant's
iron heel.
And how did it all come about? By the simple
expedient of taxing labor products in order that
precious landlordism might laugh and grow fat on the
bovine stupidity of the community that contributes its
own land values toward its own enslavement!
And yet men vacuously ask, "What difference does it
make?"
O tempora! O mores! To be as plain as is necessary,
it makes this four-fold difference.
- First, it robs the community of its land
values;
- second, it robs labor of its wages in the name of
taxation;
- third, it sustains and fosters landlordism, a
most conspicuously damnable difference;
- fourth, it exhibits willing workers in enforced
idleness; beholding their families in want on the one
hand, and unused land that would yield them abundance
on the other.
This last is a difference that cries to heaven for
vengeance, and if it does not always cry in vain, will
W. C. Brann be able to draw his robe close around him
and with a good conscience exclaim, "It's none of my
fault; I am not my brother's keeper."
Bill Batt: Comment on Parts of
the NYS Legislative Tax Study Commission's 1985 study
“Who Pays New York Taxes?”
Little justification exists for taxing buildings, or
improvements of any sort, so this question is easily
disposed of. The practice is explained largely as a
matter of historical inertia. Only in the recent
century or two have buildings represented any
significant capital value; prior to the rise of major
cities, the value of real property lay essentially in
land. American cities today typically record aggregate
assessed land values – at least when the
valuations are well-done – at about 40% to 60% of
total taxable value, that is, of land and buildings
taken together.31 Skyscrapers reflect enormous capital
investment, and this expenditure is warranted because
of the enormous value of locational sites. Each site
gets its market price from the fact that the total
neighborhood context creates an attractive market
presence and ambience. By taxing buildings, however, we
impose a penalty on their optimum development as well
as on the incentives for their maintenance. Moreover,
taxes on buildings take away from whatever burden would
otherwise be imposed on sites, with the result that
incentives for their highest and best use is weakened.
Lastly, the technical and administrative challenges of
properly assessing the value of improvements is
daunting, particularly since they must be depreciated
for tax and accounting purposes, evaluated for
potential replacement, and so on. In fact most costs
associated with administration of property taxation and
appeal litigation involve disputes over the valuation
of structures, not land values.
Land value taxation, on the other hand, overcomes
all these obstacles. Locations are the beneficiaries of
community services whether they are improved or not. As
has been forcefully argued by this writer and others
elsewhere,32 a tax on land value conforms to all the
textbook principles of sound tax theory. Some further
considerations are worth reviewing, however, when
looking at ground rent as a flow rather than as a
“present value” stock. The technical
ability to trace changes in the market prices of sites
– or as can also be understood, the variable flow
of ground rent to those sites – by the
application of GIS (geographic information systems)
real-time recording of sales transactions invites
wholesale changes in the maintenance of cadastral data.
The transmittal of sales records as typically received
in the offices of local governments for purposes of
title registration over to Assessors’ offices
allows for the possibility of a running real-time
mapping of market values. Given also that GIS
algorithms can now calculate the land value proportions
reasonably accurately, this means that
“landvaluescapes” are easily created in
ways analogous to maps that portray other common
geographic features. These landvaluescapes reflect the
flow of ground rent through local or regional
economies, and can also be used to identify the areas
of greatest market vitality and enterprise. The flow of
economic rent can easily be taxed in ways that
overcomes the mistaken notion that it is a stock. Just
as income is recognized as a flow of money, rent too
can (and should) be understood as such.
The question still begs to be answered, “why
tax land?” And what happens when we don’t
tax land? Henry George answered this more than a
century ago more forcefully and clearly, perhaps, than
anyone has since. He recognized full well that the
economic surplus not expended by human hands or minds
in the production of capital wealth gravitates to land.
Particular land sites come to reflect the value of
their strategic location for market exchanges by
assuming a price for their monopoly use. Regardless
whether those who acquire title to such sites use them
to the full extent of their potential, the flow of rent
to such locations is commensurate with their full
capacity. This is why John Stuart Mill more than a
century ago observed that, “Landlords grow richer
in their sleep without working, risking or economizing.
The increase in the value of land, arising as it does
from the efforts of an entire community, should belong
to the community and not to the individual who might
hold title.”33 Absent its recovery by taxation
this rent becomes a “free lunch” to
opportunistically situated titleholders. When offered
for sale, the projected rental value is capitalized in
the present value for purposes of attaching a market
price and sold as a commodity. Yet simple justice calls
for the recovery in taxes what is the community’s
creation. Moreover, the failure to recover the land
rent connected to sites makes it necessary to tax
productive activities in our economy, and this leads to
economic and technical inefficiency known as
“deadweight loss.”34 It means that the
economy performs suboptimally.
Land, and by this Henry George meant any natural
factor of production not created by human hands or
minds, is ours only to use, not to buy or sell as a
commodity. In the equally immortal words of Jefferson a
century earlier, “The earth belongs in usufruct
to the living; . . . [It is] given as a common stock
for men to labor and live on.”35 This passage
likely needs a bit of parsing for the modern reader.
The word usufruct, understood since Roman times, has
almost passed from use today. It means “the right
to use the property of another so long as its value is
not diminished.”36 Note also that Jefferson
regarded the earth as a “common stock;” not
allotted to individuals with possessory titles. Only
the phrase “to the living” might be subject
to challenge by forward-looking environmentalists who,
taking an idea from Native American cultures, argue
that “we do not inherit the earth from our
ancestors; we borrow it from our children.” The
presumption that real property titles are acquired
legitimately is a claim that does not withstand
scrutiny; rather all such titles owe their origin
ultimately to force or fraud.37
If we own the land sites that we occupy only in
usufruct, and the rent that derives from those sites is
due to community enterprise, it is not a large logical
leap to argue that the community’s recovery of
that rent should be the proper source of taxation. This
is the Georgist argument: that the recapture of land
rent is the proper – indeed the natural –
source of taxation.38 ... read the whole
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