Your use, in so many passages of your Encyclical, of
the inclusive term “property” or
“private” property, of which in morals
nothing can be either affirmed or denied, makes your
meaning, if we take isolated sentences, in many places
ambiguous. But reading it as a whole, there can be no
doubt of your intention that private property in land
shall be understood when you speak merely of private
property. With this interpretation, I find that the
reasons you urge for private property in land are eight.
Let us consider them in order of presentation. You
urge:
1. That what is bought with rightful property is
rightful property. (RN, paragraph 5) ...
2. That private property in land proceeds from
man’s gift of reason. (RN, paragraphs 6-7.)
...
3. That private property in land deprives no one of the
use of land. (RN, paragraph 8.) ...
4. That Industry expended on land gives ownership in the
land itself. (RN, paragraphs 9-10.) ...
5. That private property in land has the support of the
common opinion of mankind, and has conduced to peace and
tranquillity, and that it is sanctioned by Divine Law.
(RN, paragraph 11.) ...
6. That fathers should provide for their children and
that private property in land is necessary to enable them
to do so. (RN, paragraphs 14-17.) ...
7. That the private ownership of land stimulates
industry, increases wealth, and attaches men to the soil
and to their country. (RN, paragraph 51.) ...
8. That the right to possess private property in land is
from nature, not from man; that the state has no right to
abolish it, and that to take the value of landownership
in taxation would be unjust and cruel to the private
owner. (RN, paragraph 51.)
2. That private property in land proceeds from
man’s gift of reason. (6-7.)
In the second place your Holiness argues that man
possessing reason and forethought may not only acquire
ownership of the fruits of the earth, but also of the
earth itself, so that out of its products he may make
provision for the future.
Reason, with its attendant forethought, is indeed the
distinguishing attribute of man; that which raises him
above the brute, and shows, as the Scriptures declare,
that he is created in the likeness of God. And this gift
of reason does, as your Holiness points out, involve the
need and right of private property in whatever is
produced by the exertion of reason and its attendant
forethought, as well as in what is produced by physical
labor. In truth, these elements of man’s production
are inseparable, and labor involves the use of reason. It
is by his reason that man differs from the animals in
being a producer, and in this sense a maker. Of
themselves his physical powers are slight, forming as it
were but the connection by which the mind takes hold of
material things, so as to utilize to its will the matter
and forces of nature. It is mind, the intelligent reason,
that is the prime mover in labor, the essential agent in
production.
The right of private ownership does therefore
indisputably attach to things provided by man’s
reason and forethought. But it cannot attach to things
provided by the reason and forethought of God!
To illustrate: Let us suppose a company traveling
through the desert as the Israelites traveled from Egypt.
Such of them as had the forethought to provide themselves
with vessels of water would acquire a just right of
property in the water so carried, and in the thirst of
the waterless desert those who had neglected to provide
themselves, though they might ask water from the
provident in charity, could not demand it in right. For
while water itself is of the providence of God, the
presence of this water in such vessels, at such place,
results from the providence of the men who carried it.
Thus they have to it an exclusive right.
But suppose others use their forethought in pushing
ahead and appropriating the springs, refusing when their
fellows come up to let them drink of the water save as
they buy it of them. Would such forethought give any
right?
Your Holiness, it is not the forethought of carrying
water where it is needed, but the forethought of seizing
springs, that you seek to defend in defending the private
ownership of land!
Let me show this more fully, since it may be worth
while to meet those who say that if private property in
land be not just, then private property in the products
of labor is not just, as the material of these products
is taken from land. It will be seen on consideration that
all of man’s production is analogous to such
transportation of water as we have supposed. In growing
grain, or smelting metals, or building houses, or weaving
cloth, or doing any of the things that constitute
producing, all that man does is to change in place or
form preexisting matter. As a producer man is merely a
changer, not a creator; God alone creates. And since the
changes in which man’s production consists inhere
in matter so long as they persist, the right of private
ownership attaches the accident to the essence, and gives
the right of ownership in that natural material in which
the labor of production is embodied. Thus water, which in
its original form and place is the common gift of God to
all men, when drawn from its natural reservoir and
brought into the desert, passes rightfully into the
ownership of the individual who by changing its place has
produced it there.
But such right of ownership is in reality a mere right
of temporary possession. For though man may take material
from the storehouse of nature and change it in place or
form to suit his desires, yet from the moment he takes
it, it tends back to that storehouse again. Wood decays,
iron rusts, stone disintegrates and is displaced, while
of more perishable products, some will last for only a
few months, others for only a few days, and some
disappear immediately on use. Though, so far as we can
see, matter is eternal and force forever persists; though
we can neither annihilate nor create the tiniest mote
that floats in a sunbeam or the faintest impulse that
stirs a leaf, yet in the ceaseless flux of nature,
man’s work of moving and combining constantly
passes away. Thus the recognition of the ownership of
what natural material is embodied in the products of man
never constitutes more than temporary possession —
never interferes with the reservoir provided for all. As
taking water from one place and carrying it to another
place by no means lessens the store of water, since
whether it is drunk or spilled or left to evaporate, it
must return again to the natural reservoirs — so is
it with all things on which man in production can lay the
impress of his labor.
Hence, when you say that man’s reason puts it
within his right to have in stable and permanent
possession not only things that perish in the using, but
also those that remain for use in the future, you are
right in so far as you may include such things as
buildings, which with repair will last for generations,
with such things as food or fire-wood, which are
destroyed in the use. But when you infer that man can
have private ownership in those permanent things of
nature that are the reservoirs from which all must draw,
you are clearly wrong. Man may indeed hold in private
ownership the fruits of the earth produced by his labor,
since they lose in time the impress of that labor, and
pass again into the natural reservoirs from which they
were taken, and thus the ownership of them by one works
no injury to others. But he cannot so own the earth
itself, for that is the reservoir from which must
constantly be drawn not only the material with which
alone men can produce, but even their very bodies.
The conclusive reason why man cannot claim ownership
in the earth itself as he can in the fruits that he by
labor brings forth from it, is in the facts stated by you
in the very next paragraph (7), when you truly say:
Man’s needs do not die out, but recur; satisfied
today, they demand new supplies tomorrow. Nature,
therefore, owes to man a storehouse that shall never
fail, the daily supply of his daily wants. And this he
finds only in the inexhaustible fertility of the
earth.
By man you mean all men. Can what nature owes to all
men be made the private property of some men, from which
they may debar all other men?
Let me dwell on the words of your Holiness,
“Nature, therefore, owes to man a storehouse that
shall never fail.” By Nature you mean God. Thus
your thought, that in creating us, God himself has
incurred an obligation to provide us with a storehouse
that shall never fail, is the same as is thus expressed
and carried to its irresistible conclusion by the
Bishop of
Meath:
God was perfectly free in the act by which He
created us; but having created us he bound himself by
that act to provide us with the means necessary for our
subsistence. The land is the only source of this kind
now known to us. The land, therefore, of every country
is the common property of the people of that country,
because its real owner, the Creator who made it, has
transferred it as a voluntary gift to them.
“Terram autem dedit filiis
hominum.” Now, as every individual in that
country is a creature and child of God, and as all his
creatures are equal in his sight, any settlement of the
land of a country that would exclude the humblest man
in that country from his share of the common
inheritance would be not only an injustice and a wrong
to that man, but, moreover, be AN IMPIOUS RESISTANCE TO
THE BENEVOLENT INTENTIONS OF HIS CREATOR.
... read
the whole letter
A Deeper Examination of the Property Taxation
Quagmire
This last caveat suggests what is likely the most
critical failing of the Report. The use of an income
snapshot as the basis for measuring the effective tax
burden on owners of real property reflects a
misunderstanding of how tax equity should be construed.
The value of property titles is a measure of wealth, and
is likely to have little if any bearing on any momentary
snapshot of income in a household. This confusion lies at
the very core of difficulties in assessing the fairness
of the property tax. Several studies of tax equity
involving the real property tax fail to recognize that
they are using income as a benchmark for analysis, even
while the tax is upon wealth.
The problem as I see it is the mixing of two separate
dimensions of economic value – what are frequently
referred to as stock and flow. Stock
value is a variable that has no time dimension, e.g., the
stock of capital, or what in real estate is typically
understood as the market price of a parcel.19 Flow, by
contrast, is the quantity of an economic variable
measured over a period of time. So the flow of an
investment may be measured as the amount of investment
expenditure or the amount of income return in a given
time, such as in a yearly period.20 We can easily
understand stock when looking at the value of a house or
an office building just as we can for a car or a
computer, as it represents the investment of labor and
capital, and can be priced based on market supply and
demand, depreciation, and replacement value much as with
any other manufactured good.
The other component of a real property parcel is the
land value, which reflects a market price based on very
different criteria. Despite the apparent reality that
land is visible and tangible, land prices reflect the
value of location more than they do the material content
they contain. This is easy to understand when one
reflects that if some earth is removed from a site and
brought to another place, the prices of each site is
largely unaffected.21 Location value has duration, and
the value of this flow of rights for exclusive use of a
site requires a flow price rather than a stock price.
This flow is really what classical economists refer to as
ground rent or economic rent.22 Also known as “land
rent,” it is defined as “a payment to a
factor beyond what is needed to put that factor into use;
[it is a price for use] beyond what is needed to maintain
a market for land.”23 Land has a selling price
because we have come to regard land sites as objects, as
commodities to be traded,24 and they are understood to
have a static price, as a stock rather than as a flow.
That stock price really needs to be understood instead as
the “present value” of the flow of ground
rent minus taxes. “Present value” is an
economic term that refers to “the worth of a future
stream of returns or costs in terms of their value
now.”25 Consideration in this way brings to the
fore other concerns and factors. ... read the whole
commentary