Fruits
of One's Labor
How do we divide the fruits of production between the individual and
the community? Take a look at http://www.henrygeorge.org/isms.htm for
four graphics which illustrate clearly the "left-wing,"
"right-wing," and "middle-of-the-road" approaches,
and the Georgist proposal.
The return to land is rent; the return to labor is wages; the return to
capital is interest. Today, we tax each a bit, but that is just a tradition,
and it is one that leads to a number of evils in our society, poverty and
sprawl being just two of them.
When I first thought about "fruits of one's labor," I thought
of it as being largely about labor, but had the "aha!" moment that
is is equally about
capital (one's savings, invested in manmade things to enable more efficient
production): that under the current conditions of land monopoly capitalism,
capital is
not receiving its just return any more than labor is: labor and capital share
what's left after land has taken the lion's share. But by enacting George's
remedy — taking rent as our common treasure and the basis of our common
spending — both labor and capital will receive more. (And if one's
wages are higher, one may be able to save — toward retirement, toward
owning one's own business, and thus be a capitalist as well as a laborer.)
But one should not be able to buy other people with one's earnings, either
by purchasing slaves or through ownership of land.
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)
The truth is self-evident. Put to any one capable of consecutive thought this
question:
"Suppose there should arise from the English Channel or the German
Ocean a no man's land on which common labor to an unlimited amount should
be able
to make thirty shillings a day and which should remain unappropriated and
of free access, like the commons which once comprised so large a part of
English
soil. What would be the effect upon wages in England?"
He would at once tell you that common wages throughout England must soon increase
to thirty shillings a day.
And in response to another question, "What would be the effect on rents?" he
would at a moment's reflection say that rents must necessarily fall; and
if he thought out the next step he would tell you that all this would happen
without
any very large part of English labor being diverted to the new natural
opportunities, or the forms and direction of industry being much changed;
only that kind of
production being abandoned which now yields to labor and to landlord together
less than labor could secure on the new opportunities. The great rise in
wages would be at the expense of rent.
Take now the same man or another — some hardheaded business man, who
has no theories, but knows how to make money. Say to him: "Here is a little
village; in ten years it will be a great city — in ten years the
railroad will have taken the place of the stage coach, the electric light
of the candle;
it will abound with all the machinery and improvements that so enormously
multiply the effective power of labor. Will, in ten years, interest be
any higher?"
He will tell you, "No!"
"Will the wages of common labor be any higher; will it be easier for
a man who has nothing but his labor to make an independent living?"
He will tell you, "No; the wages of common labor will not be any higher;
on the contrary, all the chances are that they will be lower; it will not
be easier for the mere laborer to make an independent living; the chances
are
that it will be harder."
"What, then, will be higher?"
"Rent; the value of land. Go, get yourself a piece of ground, and hold
possession."
And if, under such circumstances, you take his advice, you need do nothing
more. You may sit down and smoke your pipe; you may lie around like the lazzaroni
of Naples or the leperos of Mexico; you may go up in a balloon, or down a hole
in the ground; and without doing one stroke of work, without adding one iota
to the wealth of the community, in ten years you will be rich! In the new city
you may have a luxurious mansion; but among its public buildings will be an
almshouse.
For land is the habitation of man, the storehouse upon which be 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
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty:
11 Effect of Remedy Upon the Sharing of Wealth (in the unabridged P&P: Part
IX Effects of the Remedy — Chapter 2: Of the Effect Upon Distribution
and Thence Upon Production
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. ... read the whole chapter
Henry George: The
Land Question (1881)
Here is a system which robs the
producers of wealth as
remorselessly and far more regularly and systematically than the
pirate robs the merchantman. Here is a system that steadily condemns
thousands to far more lingering and horrible deaths than that of
walking the plank – to death of the mind and death of the soul, as
well as death of the body. These things are undisputed. No one denies
that Irish pauperism and famine are the direct results of this land
system, and no one who will examine the subject will deny that the
chronic pauperism and chronic famine which everywhere mark our
civilization are the results of this system. Yet we are
told – nay, it seems to be taken for granted – that this system
cannot be abolished without buying off those who profit by it. Was
there ever more degrading abasement of the human mind before a
fetish? Can we wonder, as we see it, at any perversion of ideas?
Consider: is not the parallel I
have drawn a true one? Is it not
just as much a perversion of ideas to apply the doctrine of vested
rights to property in land, when these are its admitted fruits, as it
was to apply it to property in human flesh and blood; as it would be
to apply it to the business of piracy? In what does the claim of the
Irish landholders differ from that of the hereditary pirate or the
man who has bought out a piratical business? "Because I have
inherited or purchased the business of robbing merchantmen," says the
pirate, "therefore respect for the rights of property must compel you
to let me go on robbing ships and making sailors walk the plank until
you buy me out." "Because we have
inherited or purchased the
privilege of appropriating to ourselves the lion's share of the
produce of labor," says the landlord, "therefore you must
continue to
let us do it, even though poor wretches shiver with cold and faint
with hunger, even though, in their poverty and misery, they are
reduced to wallow with the pigs." What is the difference?... read the whole article
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894)
4. CONFORMITY TO GENERAL PRINCIPLES OF TAXATION
The single tax conforms most closely to the essential principles of Adam
Smith's four classical maxims, which are stated best by Henry George 19 as
follows:
The best tax by which public revenues can be raised is evidently that which
will closest conform to the following conditions:
- That it bear as lightly as possible upon production — so as least
to check the increase of the general fund from which taxes must be paid
and the community maintained. 20
- That it be easily and cheaply collected, and fall as directly as may
be upon the ultimate payers — so as to take from the people as little
as possible in addition to what it yields the government. 21
- That it be certain — so as to give the least opportunity for tyranny
or corruption on the part of officials, and the least temptation to law-breaking
and evasion on the part of the tax-payers. 22
- That it bear equally — so as to give no citizen an advantage or
put any at a disadvantage, as compared with others. 23
19. "Progress and Poverty," book viii. ch.iii.
20. This is the second part of Adam Smith's fourth maxim.
He states it as follows: "Every tax ought to be so contrived as
both to take out and to keep out of the pockets of the people as little
as possible over and above what it brings into the public treasury of
the state. A tax may either take out or keep out of the pockets of the
people a great deal more than it brings into the public treasury in the
four following ways: . . . Secondly, it may obstruct the industry of
the people, and discourage them from applying to certain branches of
business which might give maintenance and employment to great multitudes.
While it obliges the people to pay, it may thus diminish or perhaps destroy
some of the funds which might enable them more easily to do so."
21. This is the first part of Adam Smith's fourth maxim,
in which he condemns a tax that takes out of the pockets of the people
more than it brings into the public treasury.
22. This is Adam Smith's second maxim. He states it as
follows: "The tax which each individual is bound to pay ought to
be certain and not arbitrary. The time of payment, the manner of payment,
the quantity to be paid, ought all to be clear and plain to the contributor
and to every other person. Where it is otherwise, every person subject
to the tax is put more or less in the power of the tax gatherer."
23. This is Adam Smith's first maxim. He states it as
follows: "The subjects of every state ought to contribute towards
the support of the government as nearly as possible in proportion to
their respective abilities, that is to say, in proportion to the revenue
which they respectively enjoy under the protection of the state. The
expense of government to the individuals of a great nation is like the
expense of management to the joint tenants of a great estate, who are
all obliged to contribute in proportion to their respective interests
in the estate. In the observation or neglect of this maxim consists what
is called the equality or inequality of taxation."
In changing this Mr. George says ("Progress
and Poverty," book viii, ch. iii, subd. 4): "Adam Smith
speaks of incomes as enjoyed 'under the protection of the state'; and
this is the ground upon which the equal taxation of all species of
property is commonly insisted upon — that it is equally protected
by the state. The basis of this idea is evidently that the enjoyment
of property is made possible by the state — that there is a value
created and maintained by the community; which is justly called upon
to meet community expenses. Now, of what values is this true? Only
of the value of land. This is a value that does not arise until a community
is formed, and that, unlike other values, grows with the growth of
the community. It only exists as the community exists. Scatter again
the largest community, and land, now so valuable, would have no value
at all. With every increase of population the value of land rises;
with every decrease it falls. This is true of nothing else save of
things which, like the ownership of land, are in their nature monopolies."
Adam Smith's third maxim refers only to conveniency of
payment, and gives countenance to indirect taxation, which is in conflict
with the principle of his fourth maxim. Mr. George properly excludes
it.
a. Interference with Production
Indirect taxes tend to check production and cause scarcity, by obstructing
the processes of production. They fall upon men as they work, as they
do business, as they invest capital productively. 24 But the single
tax, which must be paid and be the same in amount regardless of whether the
payer works or plays, of whether he invests his capital productively or wastes
it, of whether he uses his land for the most productive purposes 25 or in lesser
degree or not at all, removes fiscal penalties from industry and thrift, and
tends to leave production free. It therefore conforms more closely than indirect
taxation to the first maxim quoted above.
24. "Taxation which falls upon the processes of production
interposes an artificial obstacle to the creation of wealth. Taxation
which falls upon labor as it is exerted, wealth as it is used as capital,
land as it is cultivated, will manifestly tend to discourage production
much more powerfully than taxation to the same amount levied upon laborers
whether they work or play, upon wealth whether used productively or unproductively,
or upon land whether cultivated or left waste" — Progress
and Poverty, book viii, ch. iii, subd. I.
25. It is common, besides taxing improvements, as fast
as they are made, to levy higher taxes upon land when put to its best
use than when put to partial use or to no use at all. This is upon the
theory that when his land is used the owner gets full income from it
and can afford to pay high taxes; but that he gets little or no income
when the land is out of use, and so cannot afford to pay much. It is
an absurd but perfectly legitimate illustration of the pretentious doctrine
of taxation according to ability to pay.
Examples are numerous. Improved building lots, and even
those that are only plotted for improvement, are usually taxed more than
contiguous unused and unplotted land which is equally in demand for building
purposes and equally valuable. So coal land, iron land, oil land, and
sugar land are as a rule taxed less as land when opened up for appropriate
use than when lying idle or put to inferior uses, though the land value
be the same. Any serious proposal to put land to its appropriate use
is commonly regarded as a signal for increasing the tax upon it.
b. Cheapness of Collection
Indirect taxes are passed along from first payers to final consumers through
many exchanges, accumulating compound profits as they go, until they take
enormous sums from the people in addition to what the government receives.26
But the single tax takes nothing from the people in excess of the tax. It
therefore conforms more closely than indirect taxation to the second maxim
quoted above.
c. Certainty
No other tax, direct or indirect, conforms so closely to the third maxim. "Land
lies out of doors." It cannot be hidden; it cannot be "accidentally" overlooked.
Nor can its value be seriously misstated. Neither under-appraisement nor
over-appraisement to any important degree is possible without the connivance
of the whole community. 27 The land values of a neighborhood are matters
of common knowledge. Any intelligent resident can justly appraise them, and
every other intelligent resident can fairly test the appraisement. Therefore,
the tyranny, corruption, fraud, favoritism, and evasions that are so common
in connection with the taxation of imports, manufactures, incomes, personal
property, and buildings — the values of which, even when the object
itself cannot be hidden, are so distinctly matters of minute special knowledge
that only experts can fairly appraise them — would be out of the question
if the single tax were substituted for existing fiscal methods. 28
d. Equality
In respect of the fourth maxim the single tax bears more equally— that
is to say, more justly — than any other tax. It is the only tax that
falls upon the taxpayer in proportion to the pecuniary benefits he receives
from the public; 29 and its tendency, accelerating with the increase of the
tax, is to leave every one the full fruit of his own productive enterprise
and effort. 30
29 The benefits of government are not the only public
benefits whose value attaches exclusively to land. Communal development
from whatever cause produces the same effect. But as it is under the
protection of government that land-owners are able to maintain ownership
of land and through that to enjoy the pecuniary benefits of advancing
social conditions, government confers upon them as a class not only the
pecuniary benefits of good government but also the pecuniary benefits
of progress in general.
30. "Here are two men of equal incomes — that
of the one derived from the exertion of his labor, that of the other
from the rent of land. Is it just that they should equally contribute
to the expenses of the state? Evidently not. The income of the one represents
wealth he creates and adds to the general wealth of the state; the income
of the other represents merely wealth that he takes from the general
stock, returning nothing." — Progress and Poverty, book
viii, ch. iii, subd. 4.
... read the book
Winston Churchill: The
People's Land
Tax
on capital value of undeveloped land But there is another
proposal concerning land values which is not less
important. I mean the tax on the capital value of undeveloped urban or
suburban land. The income derived from land and its rateable value
under the present law depend upon the use to which the land is put,
consequently income and rateable value are not always true or complete
measures of the value of the land. Take the case to which I have
already referred of the man who keeps a large plot in or near a growing
town idle for years while it is ripening -- that is to say, while it is
rising in price through the exertions of the surrounding community and
the need of that community for more room to live. Take that case. I
daresay you have formed your own opinion upon it. Mr Balfour, Lord
Lansdowne, and the Conservative Party generally, think that is an
admirable arrangement. They speak of
the profits of the land monopolist
as if they were the fruits of thrift and industry and a pleasing
example for the poorer classes to imitate. We do not take that
view of
the process. We think it is a dog-in-the-manger
game. We see the evil, we see the imposture upon the public, and we see
the consequences in crowded slums, in hampered commerce, in distorted
or restricted development, and in congested centres of population, and
we say here and now to the land monopolist who is holding up his land
-- and the pity is it was not said before -- you shall judge for
yourselves whether it is a fair offer or not. We say to the land monopolist: 'This
property of yours might be put to immediate use with general advantage.
It is at this minute saleable in the market at ten times the value at
which it is rated. If you choose to keep it idle in the expectation of
still further unearned increment, then at least you shall he taxed at
the true selling value in the meanwhile.' And the Budget
proposes a tax of a halfpenny in the pound on the capital value of all
such land; that is to say, a tax which is a little less in equivalent
than the income tax would be upon the property if the property were
fully developed. That is the second main proposal of the Budget with
regard to the land, and its effects will be,
- first, to raise an expanding revenue for the needs of the
State;
- secondly, half the proceeds of this tax, as well as of the
other
land taxes, will go to the municipalities and local authorities
generally to relieve rates;
- thirdly, the effect
will be, as we believe, to bring land into the market, and thus
somewhat cheapen the price at which land is obtainable for every
object, public and private, and by so doing we shall liberate new
springs of enterprise and industry, we shall stimulate building,
relieve overcrowding, and promote employment. ... Read the whole piece
Dan Sullivan: Are you a Real
Libertarian, or a ROYAL Libertarian?
We call ourselves the "party of
principle," and we base property
rights on the principle that everyone is entitled to the fruits of
his labor. Land, however, is not the fruit of anyone's labor, and our
system of land tenure is based not on labor, but on decrees of
privilege issued from the state, called titles. In fact, the term
"real estate" is Middle English (originally French) for "royal
state." The "title" to land is the essence of the title of nobility,
and the root of noble privilege. ... Read the whole piece
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
As with all nineteenth century
moral philosophers, Henry George
subscribed to a belief in natural law. The natural order of things as
he saw it required that land be held in usufruct and that rent from
such should be returned to society. The theory was inspired by his
deeply religious roots and grounded in his reading of the prominent
thinkers that predated him. The natural order was also a moral order,
and the failure to comply with the order of nature and society as he
saw it was a perversion of justice. The
fruits of the land belonged to
everyone, just as the fruits of one’s own labor were uniquely one’s
own. Since one owned one’s body, one was entitled to keep the product
of one’s physical efforts. Society had no more right to confiscate the
earnings of one’s sweat and brow than it ought to leave in the hands of
rich landowners the rent that was everyone’s inherent birthright to be
shared. There were just and unjust
taxes, and the only just tax was that which grew out of rent, of the
unearned increment that visited certain land sites as windfall gains
because of the efforts and investments by the community. Income and
excise taxes were unjust and confiscatory— even theft, as especially
were tariffs. Taxing or collecting land rent alone was the means of
ending poverty and restoring progress. Indeed many Georgists reject use
of the word tax entirely, preferring instead to talk instead about rent
collection. There is even a lapel button Georgists use that says
“Abolish all taxes; collect ground rent instead.”... read the whole article
Hanno Beck: What The Polluter
Pays Principle Implies
Dinner has ended. Over a
cup of tea, Sara is talking
with Vernon:
"... and so those new policies are justified
because
of the Polluter Pays Principle." ...
Sure enough, this is what Sara tries to do.
"Well,
would you agree that if you produce an item worth a dollar, and
somebody else does pay a dollar for it, then the dollar ought to come
to you and no one else?"
"Certainly," says Vernon. "Anything else
would be
unfair."
"You're right, and the reason for that is
that you
own the fruit of your labor -- goods and services that you produce
belong to you, and so they are yours to keep or to sell. Does that
sound right?"
"Yes," replies Vernon. "If I don't get the
fruit of
my own labor then I am a victim of robbery or slavery. Of course, it
can get a little complicated. Say I produce a child's toy with the aid
of a hammer, then the owner of the hammer is also entitled to a portion
of the toy's value." ...
"Well then," Sara continues, "how about if
you
produce something worth minus one dollar. Let's say it is a bag of
trash, or a waste chemical. Now isn't that also yours? And if it costs
someone a dollar to dispose of it safely, or to recycle it, then
shouldn't that dollar come from you and no one else?"
"Ah," says Vernon. "I see what you mean. I
have to
pay for the effects of my polluting actions or else I'd be robbing
someone else. Okay, I believe the Polluter Pays Principle now." ... read
the whole article
Mason Gaffney: 18 Fallacies
3. "You cannot
take real property without compensation"
Wrong! Whoever said that has not been following zoning law. As a
rule of thumb, zoning can take away about 85% of the use value of
land before it is declared an unconstitutional 'taking' of property.
The owner must be left with some
'economically viable' use,
meaning almost any use whose revenues exceed expenses, however small
the net gain.
As to other property, well! No one
has yet been compensated for
losing the fruits of his sweated brow to the IRS, at rates which once
soared as high as 90% in the top bracket.
... Read
the whole article
|
To
share this page with a friend: right click, choose "send," and
add your comments.
|
|
Red
links have not been visited; .
Green
links are pages you've seen |
Essential Documents
pertinent to this theme:
essential_documents |
|