We hold: That—
This world is the creation of God.
The men brought into it for the brief period of their
earthly lives are the equal creatures of his bounty, the
equal subjects of his provident care.
By his constitution man is beset by physical wants, on
the satisfaction of which depend not only the maintenance
of his physical life but also the development of his
intellectual and spiritual life.
God has made the satisfaction of these wants dependent
on man’s own exertions, giving him the power and
laying on him the injunction to labor — a power
that of itself raises him far above the brute, since we
may reverently say that it enables him to become as it
were a helper in the creative work.
God has not put on man the task of making bricks
without straw. With the need for labor and the power to
labor he has also given to man the material for labor.
This material is land — man physically being a land
animal, who can live only on and from land, and can use
other elements, such as air, sunshine and water, only by
the use of land.
Being the equal creatures of the Creator, equally
entitled under his providence to live their lives and
satisfy their needs, men are equally entitled to the use
of land, and any adjustment that denies this equal use of
land is morally wrong. ...
Nor do we hesitate to say that this way of securing
the equal right to the bounty of the Creator and the
exclusive right to the products of labor is the way
intended by God for raising public revenues. For we are
not atheists, who deny God; nor semi-atheists, who deny
that he has any concern in politics and legislation.
It is true as you say — a salutary truth too
often forgotten — that “man is older than the
state, and he holds the right of providing for the life
of his body prior to the formation of any state.”
Yet, as you too perceive, it is also true that the state
is in the divinely appointed order. For He who foresaw
all things and provided for all things, foresaw and
provided that with the increase of population and the
development of industry the organization of human society
into states or governments would become both expedient
and necessary.
No sooner does the state arise than, as we all know,
it needs revenues. This need for revenues is small at
first, while population is sparse, industry rude and the
functions of the state few and simple. But with growth of
population and advance of civilization the functions of
the state increase and larger and larger revenues are
needed.
Now, He that made the world and placed man in it, He
that pre-ordained civilization as the means whereby man
might rise to higher powers and become more and more
conscious of the works of his Creator, must have foreseen
this increasing need for state revenues and have made
provision for it. That is to say: The increasing need for
public revenues with social advance, being a natural,
God-ordained need, there must be a right way of raising
them — some way that we can truly say is the way
intended by God. It is clear that this right way of
raising public revenues must accord with the moral
law.
Hence:
It must not take from individuals what rightfully
belongs to individuals.
It must not give some an advantage over others, as by
increasing the prices of what some have to sell and
others must buy.
It must not lead men into temptation, by requiring
trivial oaths, by making it profitable to lie, to swear
falsely, to bribe or to take bribes.
It must not confuse the distinctions of right and
wrong, and weaken the sanctions of religion and the state
by creating crimes that are not sins, and punishing men
for doing what in itself they have an undoubted right to
do.
It must not repress industry. It must not check
commerce. It must not punish thrift. It must offer no
impediment to the largest production and the fairest
division of wealth.
Let me ask your Holiness to consider the taxes on the
processes and products of industry by which through the
civilized world public revenues are collected — the
octroi duties that surround Italian cities with barriers;
the monstrous customs duties that hamper intercourse
between so-called Christian states; the taxes on
occupations, on earnings, on investments, on the building
of houses, on the cultivation of fields, on industry and
thrift in all forms. Can these be the ways God has
intended that governments should raise the means they
need? Have any of them the characteristics indispensable
in any plan we can deem a right one?
All these taxes violate the moral law. They take by
force what belongs to the individual alone; they give to
the unscrupulous an advantage over the scrupulous; they
have the effect, nay are largely intended, to increase
the price of what some have to sell and others must buy;
they corrupt government; they make oaths a mockery; they
shackle commerce; they fine industry and thrift; they
lessen the wealth that men might enjoy, and enrich some
by impoverishing others.
Yet what most strikingly shows how opposed to
Christianity is this system of raising public revenues is
its influence on thought.
Christianity teaches us that all men are brethren;
that their true interests are harmonious, not
antagonistic. It gives us, as the golden rule of life,
that we should do to others as we would have others do to
us. But out of the system of taxing the products and
processes of labor, and out of its effects in increasing
the price of what some have to sell and others must buy,
has grown the theory of “protection,” which
denies this gospel, which holds Christ ignorant of
political economy and proclaims laws of national
well-being utterly at variance with his teaching. This
theory sanctifies national hatreds; it inculcates a
universal war of hostile tariffs; it teaches peoples that
their prosperity lies in imposing on the productions of
other peoples restrictions they do not wish imposed on
their own; and instead of the Christian doctrine of
man’s brotherhood it makes injury of foreigners a
civic virtue.
“By their fruits ye shall know them.” Can
anything more clearly show that to tax the products and
processes of industry is not the way God intended public
revenues to be raised?
But to consider what we propose — the raising of
public revenues by a single tax on the value of land
irrespective of improvements — is to see that in
all respects this does conform to the moral law.
Let me ask your Holiness to keep in mind that the
value we propose to tax, the value of land irrespective
of improvements, does not come from any exertion of labor
or investment of capital on or in it — the values
produced in this way being values of improvement which we
would exempt. The value of land irrespective of
improvement is the value that attaches to land by reason
of increasing population and social progress. This is a
value that always goes to the owner as owner, and never
does and never can go to the user; for if the user be a
different person from the owner he must always pay the
owner for it in rent or in purchase-money; while if the
user be also the owner, it is as owner, not as user, that
he receives it, and by selling or renting the land he
can, as owner, continue to receive it after he ceases to
be a user.
Thus, taxes on land irrespective of improvement cannot
lessen the rewards of industry, nor add to prices,* nor
in any way take from the individual what belongs to the
individual. They can take only the value that attaches to
land by the growth of the community, and which therefore
belongs to the community as a whole.
* As to this point it may be well to add
that all economists are agreed that taxes on land
values irrespective of improvement or use — or
what in the terminology of political economy is styled
rent, a term distinguished from the ordinary use of the
word rent by being applied solely to payments for the
use of land itself — must be paid by the owner
and cannot be shifted by him on the user. To explain in
another way the reason given in the text: Price is not
determined by the will of the seller or the will of the
buyer, but by the equation of demand and supply, and
therefore as to things constantly demanded and
constantly produced rests at a point determined by the
cost of production — whatever tends to increase
the cost of bringing fresh quantities of such articles
to the consumer increasing price by checking supply,
and whatever tends to reduce such cost decreasing price
by increasing supply. Thus taxes on wheat or tobacco or
cloth add to the price that the consumer must pay, and
thus the cheapening in the cost of producing steel
which improved processes have made in recent years has
greatly reduced the price of steel. But land has no
cost of production, since it is created by God, not
produced by man. Its price therefore is fixed
—
1 (monopoly rent), where land is held
in close monopoly, by what the owners can extract
from the users under penalty of deprivation and
consequently of starvation, and amounts to all that
common labor can earn on it beyond what is necessary
to life;
2 (economic rent proper), where there is no special
monopoly, by what the particular land will yield to
common labor over and above what may be had by like
expenditure and exertion on land having no special
advantage and for which no rent is paid; and,
3 (speculative rent, which is a species of monopoly
rent, telling particularly in selling price), by the
expectation of future increase of value from social
growth and improvement, which expectation causing
landowners to withhold land at present prices has the
same effect as combination.
Taxes on land values or economic rent can
therefore never be shifted by the landowner to the
land-user, since they in no wise increase the demand
for land or enable landowners to check supply by
withholding land from use. Where rent depends on mere
monopolization, a case I mention because rent may in
this way be demanded for the use of land even before
economic or natural rent arises, the taking by taxation
of what the landowners were able to extort from labor
could not enable them to extort any more, since
laborers, if not left enough to live on, will die. So,
in the case of economic rent proper, to take from the
landowners the premiums they receive, would in no way
increase the superiority of their land and the demand
for it. While, so far as price is affected by
speculative rent, to compel the landowners to pay taxes
on the value of land whether they were getting any
income from it or not, would make it more difficult for
them to withhold land from use; and to tax the full
value would not merely destroy the power but the desire
to do so.
To take land values for the state, abolishing all
taxes on the products of labor, would therefore leave to
the laborer the full produce of labor; to the individual
all that rightfully belongs to the individual. It would
impose no burden on industry, no check on commerce, no
punishment on thrift; it would secure the largest
production and the fairest distribution of wealth, by
leaving men free to produce and to exchange as they
please, without any artificial enhancement of prices; and
by taking for public purposes a value that cannot be
carried off, that cannot be hidden, that of all values is
most easily ascertained and most certainly and cheaply
collected, it would enormously lessen the number of
officials, dispense with oaths, do away with temptations
to bribery and evasion, and abolish man-made crimes in
themselves innocent.
But, further: That God has intended the state to
obtain the revenues it needs by the taxation of land
values is shown by the same order and degree of evidence
that shows that God has intended the milk of the mother
for the nourishment of the babe.
See how close is the analogy. In that primitive
condition ere the need for the state arises there are no
land values. The products of labor have value, but in the
sparsity of population no value as yet attaches to land
itself. But as increasing density of population and
increasing elaboration of industry necessitate the
organization of the state, with its need for revenues,
value begins to attach to land. As population still
increases and industry grows more elaborate, so the needs
for public revenues increase. And at the same time and
from the same causes land values increase. The connection
is invariable. The value of things produced by labor
tends to decline with social development, since the
larger scale of production and the improvement of
processes tend steadily to reduce their cost. But the
value of land on which population centers goes up and up.
Take Rome or Paris or London or New York or Melbourne.
Consider the enormous value of land in such cities as
compared with the value of land in sparsely settled parts
of the same countries. To what is this due? Is it not due
to the density and activity of the populations of those
cities — to the very causes that require great
public expenditure for streets, drains, public buildings,
and all the many things needed for the health,
convenience and safety of such great cities? See how with
the growth of such cities the one thing that steadily
increases in value is land; how the opening of roads, the
building of railways, the making of any public
improvement, adds to the value of land. Is it not clear
that here is a natural law — that is to say a
tendency willed by the Creator? Can it mean anything else
than that He who ordained the state with its needs has in
the values which attach to land provided the means to
meet those needs?
That it does mean this and nothing else is confirmed
if we look deeper still, and inquire not merely as to the
intent, but as to the purpose of the intent. If we do so
we may see in this natural law by which land values
increase with the growth of society not only such a
perfectly adapted provision for the needs of society as
gratifies our intellectual perceptions by showing us the
wisdom of the Creator, but a purpose with regard to the
individual that gratifies our moral perceptions by
opening to us a glimpse of his beneficence.
Consider: Here is a natural law by which as society
advances the one thing that increases in value is land
— a natural law by virtue of which all growth of
population, all advance of the arts, all general
improvements of whatever kind, add to a fund that both
the commands of justice and the dictates of expediency
prompt us to take for the common uses of society. Now,
since increase in the fund available for the common uses
of society is increase in the gain that goes equally to
each member of society, is it not clear that the law by
which land values increase with social advance while the
value of the products of labor does not increase, tends
with the advance of civilization to make the share that
goes equally to each member of society more and more
important as compared with what goes to him from his
individual earnings, and thus to make the advance of
civilization lessen relatively the differences that in a
ruder social state must exist between the strong and the
weak, the fortunate and the unfortunate? Does it
not show the purpose of the Creator to be that the
advance of man in civilization should be an advance not
merely to larger powers but to a greater and greater
equality, instead of what we, by our ignoring of his
intent, are making it, an advance toward a more and more
monstrous inequality? ...
See how fully and how beautifully Christ’s life
on earth illustrated this law. Entering our earthly life
in the weakness of infancy, as it is appointed that all
should enter it, he lovingly took what in the natural
order is lovingly rendered, the sustenance, secured by
labor, that one generation owes to its immediate
successors. Arrived at maturity, he earned his own
subsistence by that common labor in which the majority of
men must and do earn it. Then passing to a higher —
to the very highest — sphere of labor, he earned
his subsistence by the teaching of moral and spiritual
truths, receiving its material wages in the
love-offerings of grateful hearers, and not refusing the
costly spikenard with which Mary anointed his feet. So,
when he chose his disciples, he did not go to landowners
or other monopolists who live on the labor of others, but
to common laboring-men. And when he called them
to a higher sphere of labor and sent them out to teach
moral and spiritual truths, he told them to take, without
condescension on the one hand or sense of degradation on
the other, the loving return for such labor, saying to
them that “the laborer is worthy of his
hire,” thus showing, what we hold, that all labor
does not consist in what is called manual labor, but that
whoever helps to add to the material, intellectual, moral
or spiritual fullness of life is also a
laborer.*
* Nor should it be forgotten that the
investigator, the philosopher, the teacher, the artist,
the poet, the priest, though not engaged in the
production of wealth, are not only engaged in the
production of utilities and satisfactions to which the
production of wealth is only a means, but by acquiring
and diffusing knowledge, stimulating mental powers and
elevating the moral sense, may greatly increase the
ability to produce wealth. For man does not live by
bread alone. . . . He who by any exertion of
mind or body adds to the aggregate of enjoyable wealth,
increases the sum of human knowledge, or gives to human
life higher elevation or greater fullness — he
is, in the large meaning of the words, a
“producer,” a “working-man,” a
“laborer,” and is honestly earning honest
wages. But he who without doing aught to make mankind
richer, wiser, better, happier, lives on the toil of
others — he, no matter by what name of honor he
may be called, or how lustily the priests of Mammon may
swing their censers before him, is in the last analysis
but a beggar-man or a thief. —
Protection or Free Trade, pp. 74-75.
In assuming that laborers, even ordinary manual
laborers, are naturally poor, you ignore the fact that
labor is the producer of wealth, and attribute to the
natural law of the Creator an injustice that comes from
man’s impious violation of his benevolent
intention. In the rudest stage of the arts it is
possible, where justice prevails, for all well men to
earn a living. With the labor-saving appliances of our
time, it should be possible for all to earn much more.
And so, in saying that poverty is no disgrace, you convey
an unreasonable implication. For poverty ought to be a
disgrace, since in a condition of social justice, it
would, where unsought from religious motives or unimposed
by unavoidable misfortune, imply recklessness or
laziness.
The sympathy of your Holiness seems exclusively
directed to the poor, the workers. Ought this to be so?
Are not the rich, the idlers, to be pitied also? By the
word of the gospel it is the rich rather than the poor
who call for pity, for the presumption is that they will
share the fate of Dives. And to any one who believes in a
future life the condition of him who wakes to find his
cherished millions left behind must seem pitiful. But
even in this life, how really pitiable are the rich. The
evil is not in wealth in itself — in its command
over material things; it is in the possession of wealth
while others are steeped in poverty; in being raised
above touch with the life of humanity, from its work and
its struggles, its hopes and its fears, and above all,
from the love that sweetens life, and the kindly
sympathies and generous acts that strengthen faith in man
and trust in God.
Consider how the rich see the meaner side of human
nature; how they are surrounded by flatterers and
sycophants; how they find ready instruments not only to
gratify vicious impulses, but to prompt and stimulate
them; how they must constantly be on guard lest they be
swindled; how often they must suspect an ulterior motive
behind kindly deed or friendly word; how if they try to
be generous they are beset by shameless beggars and
scheming impostors; how often the family affections are
chilled for them, and their deaths anticipated with the
ill-concealed joy of expectant possession. The
worst evil of poverty is not in the want of material
things, but in the stunting and distortion of the higher
qualities. So, though in another way, the possession of
unearned wealth likewise stunts and distorts what is
noblest in man.
God’s commands cannot be evaded with impunity.
If it be God’s command that men shall earn their
bread by labor, the idle rich must suffer. And they do.
See the utter vacancy of the lives of those who live for
pleasure; see the loathsome vices bred in a class who
surrounded by poverty are sated with wealth. See that
terrible punishment of ennui, of which the poor know so
little that they cannot understand it; see the pessimism
that grows among the wealthy classes — that shuts
out God, that despises men, that deems existence in
itself an evil, and fearing death yet longs for
annihilation.
When Christ told the rich young man who sought him to
sell all he had and to give it to the poor, he was not
thinking of the poor, but of the young man. And I doubt
not that among the rich, and especially among the
self-made rich, there are many who at times at least feel
keenly the folly of their riches and fear for the dangers
and temptations to which these expose their children. But
the strength of long habit, the prompting of pride, the
excitement of making and holding what have become for
them the counters in a game of cards, the family
expectations that have assumed the character of rights,
and the real difficulty they find in making any good use
of their wealth, bind them to their burden, like a weary
donkey to his pack, till they stumble on the precipice
that bounds this life.
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