What should we reward?
Should our society's incentives be set up to reward those who seek
to privatize the economic value our land and other natural resources
for their own benefit, or for their own children or
grandchildren, or should the incentives be arranged to encourage
the treatment of the land and natural resources as our common treasure?
Should the great-grandchildren of the landed start life
with more than the great-grandchildren of those who had no land? Georgists
seek to create a level playing field on which both groups have equal
access to all natural opportunities, and all have the incentives
To the extent that foresight consists of being able to envision
a city where a town is now, and having enough money to buy land
there, foresight does not create anything useful for society.
be rewarding land speculation. Rather, we should be rewarding
those who create jobs, those who create housing, those who create
our natural resources, not making it possible for those with "foresight" to
get there first and be permitted to charge those creators for
access to the land!
Charles T. Root — Not a Single Tax! (1925)
... But before this time the reader, unless he has given previous attention
to the subject, is full of objections to the above doctrine: "How about
the law?" he is asking. "Hasn't a man the right to buy a piece of
land as cheaply as he can, to do what he pleases with it, and hold on to it
he gets ready to sell?" The answer is that at present he certainly
has this statutory right, which has been so long and so universally recognized
that most people suppose it to be not only a legal, but a real or equitable
right. A shrewd man, foreseeing the direction of growth of population in
city, for example, can buy a well-located block at a moderate figure from
some less far-seeing owner, can let it grow up to weeds, fence it off against
comers and give it no further attention except to pay the very small tax
usually imposed upon vacant land.
Meantime the increasing community builds up all around it with homes, banks,
stores, churches, schools, paving and lighting the streets, giving police and
fire protection, etc., and at last comes to need this block so urgently that
the owner is fairly begged to sell it, at three or ten or fifty times what
it cost him. Quite often the purchaser at this enormous advance is the very
community which has through its presence and the expenditure of its taxes created
practically the whole value of the land in question!
It was said above that an individual has a statutory right to pursue this
very common course. That was an error. The statement should have been that
he has a statutory wrong; for no disinterested person can follow the course
of land speculation as almost universally practiced, without feeling its rank
injustice. ... read the whole article
Upton Sinclair: The Consequences of Land
Speculation are Tenantry and Debt on the Farms, and Slums and Luxury in the
I know of a woman — I have never had the pleasure of making her acquaintance,
because she lives in a lunatic asylum, which does not happen to be on my
visiting list. This woman has been mentally incompetent from birth. She is
care of, because her father left her when he died the income of a large
farm on the outskirts of a city. The city has since grown and the land is
at conservative estimate, about twenty million dollars. It is covered with
office buildings, and the greater part of the income, which cannot be spent
by the woman, is piling up at compound interest. The woman enjoys good
health, so she may be worth a hundred million dollars before she dies.
I choose this case because it is one about which there can be no disputing;
this woman has never been able to do anything to earn that twenty million dollars.
And if a visitor from Mars should come down to study the situation, which would
he think was most insane, the unfortunate woman, or the society which compels
thousands of people to wear themselves to death in order to pay her the income
of twenty million dollars?
The fact that this woman is insane makes it easy to see that she is not
entitled to the "unearned increment" of the land she owns. But how about all
the other people who have bought up and are holding for speculation the most
desirable land? The value of this land increases, not because of anything these
owners do — not because of any useful service they render to the community — but
purely because the community as a whole is crowding into that neighborhood
and must have use of the land.
The speculator who bought this land thinks that he deserves the increase,
because he guessed the fact that the city was going to grow that way. But it
seems clear enough that his skill in guessing which way the community was going
to grow, however useful that skill may be to himself, is not in any way useful
to the community. The man may have planted trees, or built roads, and put in
sidewalks and sewers; all that is useful work, and for that he should be paid.
But should he be paid for guessing what the rest of us were going to need?
Before you answer, consider the consequences of this guessing game. The
consequences of land speculation are tenantry and debt on the farms, and
slums and luxury
in the cities. A great part of the necessary land is held out of use, and
so the value of all land continually increases, until the poor man can no
own a home. The value of farm land also increases; so year by year more
independent farmers are dispossessed, because they cannot pay interest on
So the land becomes a place of serfdom, that land described by the poet, "where
wealth accumulates and men decay." The great cities fill up with festering
slums, and a small class of idle parasites are provided with enormous fortunes,
which they do not have to earn, and which they cannot intelligently spend.
... read the whole article
Henry George: The Condition of
Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
... 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
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
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
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
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
man, but, moreover, be AN IMPIOUS RESISTANCE TO THE BENEVOLENT INTENTIONS
OF HIS CREATOR.
... read the whole letter
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
Any failure to pay back that
increment to society, or of government to
recapture it in the form of taxes, constituted not only an injustice to
the poor but a distortion of economic equilibrium. He witnessed first
hand the perverted configurations of land use that today we know as sprawl development— even in his
time it was apparent that urban, high value land parcels were being
held off the market for speculative gain by meretricious interests. He
witnessed also the boom and bust cycles of the land markets on account
of such speculation, effects which spread far wider than just land
prices. These inevitable cycles would dislocate labor and capital
supply, giving impetus to the impoverishment and suffering which he
himself had experienced. He understood that holding the most
strategically valuable landsites out of circulation constituted a
burden on the economy. He understood that financial resources spent to
pay exorbitant land prices had a depressing effect on capital and
labor. And because government was taxing labor and capital instead of
recovering land rent, it was further restricting the job market and the
growth of capital. He realized that people who captured monopoly
control of strategically valuable landsites could do so because they
were privy to information prior to its public release. It was not by
any means his insight alone; it was captured also by George Washington
Plunkett writing at the same time:
an honest graft, and I’m an example of how it works. I might sum up the
whole thing by sayin’: “I seen my opportunities and I took ‘em.”
Just let me explain by
examples. My party’s in power in the city, and it’s goin’ to undertake
a lot of public improvements. Well, I’m tipped off, say, that they’re
going to lay out a new park in a certain place.
I see my opportunity and I take it. I go to that place and I buy up all
the land I can in the neighborhood. Then the board of this or that
makes its plan public, and there is a rush to get my land, which nobody
cared particularly for before.
Ain’t it perfectly honest to charge a
good price and make a profit on
my investment and foresight? Of course, it is. Well, that’s honest
32William L. Riordan,
of Tammany Hall. New York: Dutton, 1963, p. 3.
All society needed to do was to collect the
economic rent from
landholders as its rightful due, a solution that became part of the
subtitle of his book, “the remedy.” Taxing the land (or, alternatively,
collecting the economic rent) was something common citizens could
understand.... read the whole article