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Is this Socialism?

I can no more call myself an individualist or a socialist than one who considers the forces by which the planets are held to their orbits could call himself a centrifugalist or a centripetalist. —Henry George
"The socialist mistake [is] looking on capital and labor as the two factors of production and as the two parties to the division of the produce. As a matter of fact there are, in our highly-developed industrial system, three parties of production, and always a fourth and generally a fifth related to distribution. In addition to A the employing capitalist and B the employed laborer, there are C the landowner, D the tax collector and generally E the representative of monopolies other than that of land. What A and B can divide between them is not the product of their joint efforts, but the product which C, D and E leaves to them." - Henry George

Among the first questions people tend to ask when they start to hear about these ideas are whether we are talking about socialism, or even communism.  The short answer is "neither — rather, we want capitalism on a level playing field!" 

This website will lead you to think about what rightly belongs to the individual and what rightly belongs to the community.  It provides a simple way to collect for the community what is rightly common property, and to leave to the individual what he created.  So, yes, we seek to socialize that which the individual or corporation didn't create, couldn't possibly create, can't create more of — and privatize that which he does make: the fruits of his labor and the results of his saving which aren't in the nature of common property.

One of the phrases to describe America's existing economic system is "Land Monopoly Capitalism." [The board game Monopoly was an outgrowth of a turn-of-the-century game called The Landlord's Game, designed to teach these ideas.]  What Georgists are proposing is capitalism on a level playing field — something along the line of "Capitalism is a very fine system, and America really ought to try it some time!" 

Having said all that, it is also fair to say that Progress & Poverty, while explicitly and exuberantly in favor of a purer form of capitalism than is practiced anywhere in the world now, probably played a role in bringing many people in the 19th century, particularly in England, to the socialist movement, including George Bernard Shaw.

This page also contains many of Henry George's comments on socialism, few of which are positive.


See The Science of Political Economy, toward the end — the organization of a great ship.

Henry George debated Social Democrat H. M. Hyndman in London in 1889, and the text of that debate highlights the points of commonality and the very significant differences.  In The Wages of Labor, George is extremely critical of the Socialist "solution," making clear why he thinks it both wrong and ineffective.

Henry George: The Great Debate: Single Tax vs Social Democracy  (1889)

As to the injustice and wrong of present social conditions, the parties who are here represented tonight both agree. We both agree, moreover, as to the end to be sought – a condition of things in which there shall be opportunities for work for all, leisure for all, a sufficiency of the necessities of life for all, an abundance of the reasonable luxuries of life for all. (Hear, hear.)

We differ as to the means by which that end is to attained. Mr Hyndman styles himself a Social Democrat: I a Single Tax man. Let me state why we have adopted that name and what we mean by it. Looking over the civilised world today,

  • we see that labour nowhere gets its just dues. (Hear, hear.)
  • We see there is everywhere a fringe of unemployed labour.
  • We see all the phenomena that are called sometimes over-production and industrial depression;
  • we reject as superficial the theory that this is caused by there being too many people; that this is caused by there not being enough work; that this is caused by the multiplication of labour-saving machinery.
  • We say that until human wants are satisfied there can be no such thing as over-production (applause) that until all have enough there is yet plenty of work. (Hear, hear.)
  • We trace the cause of all these phenomena to one great fundamental wrong. We ask what work is, and we see that what we call productive work is alteration in place or in form of the raw material of the universe that we call land. We see that man is a land animal; that his very body comes from the land; that all his productions consist in but the working up of the land; and that land to him is absolutely necessary; and we behold everywhere the phenomena of which I have spoken. We see everywhere that this element, indispensable to all, has been made the property of some. (Hear, hear)

To that wrong we trace all the great social evils of which we complain today, and we propose to right them by going to the root and removing that wrong. (Loud applause)

It is perfectly clear that we are all here with equal rights to the use of the universe. We are all here equally entitled to the use of land. ...

Capital is wealth produced by labour from land, used again in increasing the production of wealth. And not only will it not hurt labour to leave to capital its full reward but we must leave to capital its full natural reward, if we would have a progressive community – (cheers) – and if we would give each what is his due. (Hear, hear.) What the labourers have to fight against is not competition – (hear hear and “Yes”) – but the restriction of production to their injury. Let there be competition all around from the highest to the lowest, fencing in no class against competition. Abolish monopoly everywhere, put all men on an equal footing and then trust to freedom. In that way we would have the most delicate system of co-operation that can possibly be devised by the wit of man.

The fight of labour is not against capital; it is against monopoly. Why just think of that state of things. when all the means of production belong to the community and all production is regulated by the State, when every individual would have, his work, his time of work, and everything else prescribed for him; when it would be utterly impossible for men to employ themselves! To abolish competition you must have restriction; you must call on the coercive powers of the State. How else are you going to do it? Supposing you organise industry in the way our friends dream of, if any individuals go outside of this organization and propose to compete with it, how are you going to stop their competition but by coming in with the strong arm of the law, and putting an end to it? Why such a state of society, instead of being the ideal to which the Anglo-Saxon community ought to aspire, would be going back to a worse despotism than that of ancient Egypt. (Applause and cries of “No, no.”)  ...

Now we have heard a good deal tonight, as we always do whenever our Socialist friends talk, a great deal about nationalising all the instruments of production, a great deal about making capital the property of the State, and about organising labour by the State; but I have not heard tonight, and I have yet to hear, of any practical steps in this direction. (Hear, hear.) How do they propose to begin, and what will be involved? Here let me say, to interrupt for one moment, that I have never made any proposition to confiscate the railways. What I propose to take is the rent of land for the use of the community; what I propose is to take for the community are all valuable franchises; but I would take nothing that is the product of labour for the use of the community without paying its owner its full value. Now, to take the instruments of production will involve a good deal. (Hear, hear.) The instruments of production comprise not merely the railways, not merely the ships of the steamship lines; they go down to the axe, the spade, and the other tools of the individual workman, and to the stock of the storekeeper. Are you going to take all that? (“Yes.”) It is a big job. (Laughter and applause.)

Has it ever happened in the history of the world that the men that had nothing took everything from the possessing classes? Never. And when it is taken, what do you propose to do with it? (“Use it.”) To use it under Governmental directions, and to have a Government official or a board at the head of every vocation; lawyers, doctors – I suppose no lawyers would be needed – down to milkmen, costermongers, and bootblacks. Now what does that mean? We are told it is all to be managed in the interest of the community – the whole people – but is that the history of such organization? Does not organization always mean a concentration of power in the hands of a few? Do not you men who belong, as I have belonged, to a political organization, know that always the tendency is to the management by a few? Is it not always true that when things are left to the vote of a large number of people that a few designing men always have the advantage?  ...

Wherever you end competition you give some special privilege. Monopoly in what does it consist? In the abolition of competition. What are the things of which you complain in Government? The absence of competition. Your House of Lords is not opposed to competition; it is fenced in by monopoly (Loud applause.) So wherever you find a special privilege, there you find it a special privilege because competition is excluded.

What was the essence of slavery to which Mr·Hyndman has alluded? The prohibition of competition; so no one else could employ the slave save his owner – the slave was not free to compete with owner. (Hear, hear.) If you men seriously think of these things you will see that the Social Democratic Federation vaguely proposes, if it were possible to carry it out, would inevitably result in the worst system of slavery. (Loud cries of “No; no,” and “Order”)

Simply imagine a state of things in which no one could work save under State control, in which no one could display any energy save under the control of a board of officials, and ask yourselves who this board of officials are likely to be. Socialism begins at the wrong end; it pre-supposes pure government; its dream is simply of a benevolent tyranny (“No, no.”) ...  Read the entire article

Henry George: The Condition of Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)

God’s laws do not change. Though their applications may alter with altering conditions, the same principles of right and wrong that hold when men are few and industry is rude also hold amid teeming populations and complex industries. In our cities of millions and our states of scores of millions, in a civilization where the division of labor has gone so far that large numbers are hardly conscious that they are land-users, it still remains true that we are all land animals and can live only on land, and that land is God’s bounty to all, of which no one can be deprived without being murdered, and for which no one can be compelled to pay another without being robbed. But even in a state of society where the elaboration of industry and the increase of permanent improvements have made the need for private possession of land wide-spread, there is no difficulty in conforming individual possession with the equal right to land. For as soon as any piece of land will yield to the possessor a larger return than is had by similar labor on other land a value attaches to it which is shown when it is sold or rented. Thus, the value of the land itself, irrespective of the value of any improvements in or on it, always indicates the precise value of the benefit to which all are entitled in its use, as distinguished from the value which, as producer or successor of a producer, belongs to the possessor in individual right.

To combine the advantages of private possession with the justice of common ownership it is only necessary therefore to take for common uses what value attaches to land irrespective of any exertion of labor on it. The principle is the same as in the case referred to, where a human father leaves equally to his children things not susceptible of specific division or common use. In that case such things would be sold or rented and the value equally applied.

It is on this common-sense principle that we, who term ourselves single-tax men, would have the community act.

We do not propose to assert equal rights to land by keeping land common, letting any one use any part of it at any time. We do not propose the task, impossible in the present state of society, of dividing land in equal shares; still less the yet more impossible task of keeping it so divided.

We propose — leaving land in the private possession of individuals, with full liberty on their part to give, sell or bequeath it — simply to levy on it for public uses a tax that shall equal the annual value of the land itself, irrespective of the use made of it or the improvements on it. And since this would provide amply for the need of public revenues, we would accompany this tax on land values with the repeal of all taxes now levied on the products and processes of industry — which taxes, since they take from the earnings of labor, we hold to be infringements of the right of property.

This we propose, not as a cunning device of human ingenuity, but as a conforming of human regulations to the will of God.

God cannot contradict himself nor impose on his creatures laws that clash.

If it be God’s command to men that they should not steal — that is to say, that they should respect the right of property which each one has in the fruits of his labor;

And if he be also the Father of all men, who in his common bounty has intended all to have equal opportunities for sharing;

Then, in any possible stage of civilization, however elaborate, there must be some way in which the exclusive right to the products of industry may be reconciled with the equal right to land.

If the Almighty be consistent with himself, it cannot be, as say those socialists referred to by you, that in order to secure the equal participation of men in the opportunities of life and labor we must ignore the right of private property. Nor yet can it be, as you yourself in the Encyclical seem to argue, that to secure the right of private property we must ignore the equality of right in the opportunities of life and labor. To say the one thing or the other is equally to deny the harmony of God’s laws.

But, the private possession of land, subject to the payment to the community of the value of any special advantage thus given to the individual, satisfies both laws, securing to all equal participation in the bounty of the Creator and to each the full ownership of the products of his labor. ...

... I have said enough to show your Holiness the injustice into which you fall in classing us, who in seeking virtually to abolish private property in land seek more fully to secure the true rights of property, with those whom you speak of as socialists, who wish to make all property common. But you also do injustice to the socialists.

There are many, it is true, who feeling bitterly the monstrous wrongs of the present distribution of wealth are animated only by a blind hatred of the rich and a fierce desire to destroy existing social adjustments. This class is indeed only less dangerous than those who proclaim that no social improvement is needed or is possible. But it is not fair to confound with them those who, however mistakenly, propose definite schemes of remedy.

The socialists, as I understand them, and as the term has come to apply to anything like a definite theory and not to be vaguely and improperly used to include all who desire social improvement, do not, as you imply, seek the abolition of all private property. Those who do this are properly called communists. What the socialists seek is the state assumption of capital (in which they vaguely and erroneously include land), or more properly speaking, of large capitals, and state management and direction of at least the larger operations of industry. In this way they hope to abolish interest, which they regard as a wrong and an evil; to do away with the gains of exchangers, speculators, contractors and middlemen, which they regard as waste; to do away with the wage system and secure general cooperation; and to prevent competition, which they deem the fundamental cause of the impoverishment of labor. The more moderate of them, without going so far, go in the same direction, and seek some remedy or palliation of the worst forms of poverty by government regulation. The essential character of socialism is that it looks to the extension of the functions of the state for the remedy of social evils; that it would substitute regulation and direction for competition; and intelligent control by organized society for the free play of individual desire and effort.

Though not usually classed as socialists, both the trades-unionists and the protectionists have the same essential character. The trades-unionists seek the increase of wages, the reduction of working-hours and the general improvement in the condition of wage-workers, by organizing them into guilds or associations which shall fix the rates at which they will sell their labor; shall deal as one body with employers in case of dispute; shall use on occasion their necessary weapon, the strike; and shall accumulate funds for such purposes and for the purpose of assisting members when on a strike, or (sometimes) when out of employment. The protectionists seek by governmental prohibitions or taxes on imports to regulate the industry and control the exchanges of each country, so as, they imagine, to diversify home industries and prevent the competition of people of other countries.

At the opposite extreme are the anarchists, a term which, though frequently applied to mere violent destructionists, refers also to those who, seeing the many evils of too much government, regard government in itself as evil, and believe that in the absence of coercive power the mutual interests of men would secure voluntarily what cooperation is needed.

Differing from all these are those for whom I would speak. Believing that the rights of true property are sacred, we would regard forcible communism as robbery that would bring destruction. But we would not be disposed to deny that voluntary communism might be the highest possible state of which men can conceive. Nor do we say that it cannot be possible for mankind to attain it, since among the early Christians and among the religious orders of the Catholic Church we have examples of communistic societies on a small scale. St. Peter and St. Paul, St. Thomas of Aquin and Fra Angelico, the illustrious orders of the Carmelites and Franciscans, the Jesuits, whose heroism carried the cross among the most savage tribes of American forests, the societies that wherever your communion is known have deemed no work of mercy too dangerous or too repellent — were or are communists. Knowing these things we cannot take it on ourselves to say that a social condition may not be possible in which an all-embracing love shall have taken the place of all other motives. But we see that communism is only possible where there exists a general and intense religious faith, and we see that such a state can be reached only through a state of justice. For before a man can be a saint he must first be an honest man.

With both anarchists and socialists, we, who for want of a better term have come to call ourselves single-tax men, fundamentally differ. We regard them as erring in opposite directions — the one in ignoring the social nature of man, the other in ignoring his individual nature. While we see that man is primarily an individual, and that nothing but evil has come or can come from the interference by the state with things that belong to individual action, we also see that he is a social being, or, as Aristotle called him, a political animal, and that the state is requisite to social advance, having an indispensable place in the natural order. Looking on the bodily organism as the analogue of the social organism, and on the proper functions of the state as akin to those that in the human organism are discharged by the conscious intelligence, while the play of individual impulse and interest performs functions akin to those discharged in the bodily organism by the unconscious instincts and involuntary motions, the anarchists seem to us like men who would try to get along without heads and the socialists like men who would try to rule the wonderfully complex and delicate internal relations of their frames by conscious will.

The philosophical anarchists of whom I speak are few in number, and of little practical importance. It is with socialism in its various phases that we have to do battle.

With the socialists we have some points of agreement, for we recognize fully the social nature of man and believe that all monopolies should be held and governed by the state. In these, and in directions where the general health, knowledge, comfort and convenience might be improved, we, too, would extend the functions of the state.

But it seems to us the vice of socialism in all its degrees is its want of radicalism, of going to the root. It takes its theories from those who have sought to justify the impoverishment of the masses, and its advocates generally teach the preposterous and degrading doctrine that slavery was the first condition of labor. It assumes that the tendency of wages to a minimum is the natural law, and seeks to abolish wages; it assumes that the natural result of competition is to grind down workers, and seeks to abolish competition by restrictions, prohibitions and extensions of governing power. Thus mistaking effects for causes, and childishly blaming the stone for hitting it, it wastes strength in striving for remedies that when not worse are futile. Associated though it is in many places with democratic aspiration, yet its essence is the same delusion to which the children of Israel yielded when against the protest of their prophet they insisted on a king; the delusion that has everywhere corrupted democracies and enthroned tyrants — that power over the people can be used for the benefit of the people; that there may be devised machinery that through human agencies will secure for the management of individual affairs more wisdom and more virtue than the people themselves possess. This superficiality and this tendency may be seen in all the phases of socialism.

Take, for instance, protectionism. What support it has, beyond the mere selfish desire of sellers to compel buyers to pay them more than their goods are worth, springs from such superficial ideas as that production, not consumption, is the end of effort; that money is more valuable than money’s-worth, and to sell more profitable than to buy; and above all from a desire to limit competition, springing from an unanalyzing recognition of the phenomena that necessarily follow when men who have the need to labor are deprived by monopoly of access to the natural and indispensable element of all labor. Its methods involve the idea that governments can more wisely direct the expenditure of labor and the investment of capital than can laborers and capitalists, and that the men who control governments will use this power for the general good and not in their own interests. They tend to multiply officials, restrict liberty, invent crimes. They promote perjury, fraud and corruption. And they would, were the theory carried to its logical conclusion, destroy civilization and reduce mankind to savagery.

Take trades-unionism. While within narrow lines trades-unionism promotes the idea of the mutuality of interests, and often helps to raise courage and further political education, and while it has enabled limited bodies of working-men to improve somewhat their condition, and gain, as it were, breathing-space, yet it takes no note of the general causes that determine the conditions of labor, and strives for the elevation of only a small part of the great body by means that cannot help the rest. Aiming at the restriction of competition — the limitation of the right to labor, its methods are like those of an army, which even in a righteous cause are subversive of liberty and liable to abuse, while its weapon, the strike, is destructive in its nature, both to combatants and non-combatants, being a form of passive war. To apply the principle of trades-unions to all industry, as some dream of doing, would be to enthrall men in a caste system.

Or take even such moderate measures as the limitation of working-hours and of the labor of women and children. They are superficial in looking no further than to the eagerness of men and women and little children to work unduly, and in proposing forcibly to restrain overwork while utterly ignoring its cause — the sting of poverty that forces human beings to it. And the methods by which these restraints must be enforced, multiply officials, interfere with personal liberty, tend to corruption, and are liable to abuse.

As for thoroughgoing socialism, which is the more to be honored as having the courage of its convictions, it would carry these vices to full expression. Jumping to conclusions without effort to discover causes, it fails to see that oppression does not come from the nature of capital, but from the wrong that robs labor of capital by divorcing it from land, and that creates a fictitious capital that is really capitalized monopoly. It fails to see that it would be impossible for capital to oppress labor were labor free to the natural material of production; that the wage system in itself springs from mutual convenience, being a form of cooperation in which one of the parties prefers a certain to a contingent result; and that what it calls the “iron law of wages” is not the natural law of wages, but only the law of wages in that unnatural condition in which men are made helpless by being deprived of the materials for life and work. It fails to see that what it mistakes for the evils of competition are really the evils of restricted competition — are due to a one-sided competition to which men are forced when deprived of land. While its methods, the organization of men into industrial armies, the direction and control of all production and exchange by governmental or semi-governmental bureaus, would, if carried to full expression, mean Egyptian despotism.

We differ from the socialists in our diagnosis of the evil and we differ from them as to remedies. We have no fear of capital, regarding it as the natural handmaiden of labor; we look on interest in itself as natural and just; we would set no limit to accumulation, nor impose on the rich any burden that is not equally placed on the poor; we see no evil in competition, but deem unrestricted competition to be as necessary to the health of the industrial and social organism as the free circulation of the blood is to the health of the bodily organism — to be the agency whereby the fullest cooperation is to be secured. We would simply take for the community what belongs to the community, the value that attaches to land by the growth of the community; leave sacredly to the individual all that belongs to the individual; and, treating necessary monopolies as functions of the state, abolish all restrictions and prohibitions save those required for public health, safety, morals and convenience.

But the fundamental difference — the difference I ask your Holiness specially to note, is in this: socialism in all its phases looks on the evils of our civilization as springing from the inadequacy or inharmony of natural relations, which must be artificially organized or improved. In its idea there devolves on the state the necessity of intelligently organizing the industrial relations of men; the construction, as it were, of a great machine whose complicated parts shall properly work together under the direction of human intelligence. This is the reason why socialism tends toward atheism. Failing to see the order and symmetry of natural law, it fails to recognize God.

On the other hand, we who call ourselves single-tax men (a name which expresses merely our practical propositions) see in the social and industrial relations of men not a machine which requires construction, but an organism which needs only to be suffered to grow. We see in the natural social and industrial laws such harmony as we see in the adjustments of the human body, and that as far transcends the power of man’s intelligence to order and direct as it is beyond man’s intelligence to order and direct the vital movements of his frame. We see in these social and industrial laws so close a relation to the moral law as must spring from the same Authorship, and that proves the moral law to be the sure guide of man where his intelligence would wander and go astray. Thus, to us, all that is needed to remedy the evils of our time is to do justice and give freedom. This is the reason why our beliefs tend toward, nay are indeed the only beliefs consistent with a firm and reverent faith in God, and with the recognition of his law as the supreme law which men must follow if they would secure prosperity and avoid destruction. This is the reason why to us political economy only serves to show the depth of wisdom in the simple truths which common people heard gladly from the lips of Him of whom it was said with wonder, “Is not this the Carpenter of Nazareth?”

And it is because that in what we propose — the securing to all men of equal natural opportunities for the exercise of their powers and the removal of all legal restriction on the legitimate exercise of those powers — we see the conformation of human law to the moral law, that we hold with confidence that this is not merely the sufficient remedy for all the evils you so strikingly portray, but that it is the only possible remedy.

Nor is there any other. The organization of man is such, his relations to the world in which he is placed are such — that is to say, the immutable laws of God are such, that it is beyond the power of human ingenuity to devise any way by which the evils born of the injustice that robs men of their birthright can be removed otherwise than by doing justice, by opening to all the bounty that God has provided for all.

Since man can live only on land and from land, since land is the reservoir of matter and force from which man’s body itself is taken, and on which he must draw for all that he can produce, does it not irresistibly follow that to give the land in ownership to some men and to deny to others all right to it is to divide mankind into the rich and the poor, the privileged and the helpless? Does it not follow that those who have no rights to the use of land can live only by selling their power to labor to those who own the land? Does it not follow that what the socialists call “the iron law of wages,” what the political economists term “the tendency of wages to a minimum,” must take from the landless masses — the mere laborers, who of themselves have no power to use their labor — all the benefits of any possible advance or improvement that does not alter this unjust division of land? For having no power to employ themselves, they must, either as labor-sellers or as land-renters, compete with one another for permission to labor. This competition with one another of men shut out from God’s inexhaustible storehouse has no limit but starvation, and must ultimately force wages to their lowest point, the point at which life can just be maintained and reproduction carried on. ...

You state that you approach the subject with confidence, yet in all that greater part of the Encyclical (19-67) devoted to the remedy, while there is an abundance of moral reflections and injunctions, excellent in themselves but dead and meaningless as you apply them, the only definite practical proposals for the improvement of the condition of labor are:

1. That the state should step in to prevent overwork, to restrict the employment of women and children, to secure in workshops conditions not unfavorable to health and morals, and, at least where there is danger of insufficient wages provoking strikes, to regulate wages (39-40).

2. That it should encourage the acquisition of property (in land) by working-men (50-51).

3. That working-men’s associations should be formed (52-67). These remedies so far as they go are socialistic, and though the Encyclical is not without recognition of the individual character of man and of the priority of the individual and the family to the state, yet the whole tendency and spirit of its remedial suggestions lean unmistakably to socialism — extremely moderate socialism it is true; socialism hampered and emasculated by a supreme respect for private possessions; yet socialism still. But, although you frequently use the ambiguous term “private property” when the context shows that you have in mind private property in land, the one thing clear on the surface and becoming clearer still with examination is that you insist that whatever else may be done, the private ownership of land shall be left untouched. ... read the whole letter

Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

Co-operation and Competition

MANY if not most of the writers on political economy have treated exchange as a part of distribution. On the contrary, it belongs to production. It is by exchange, and through exchange, that man obtains, and is able to exert, the power of co-operation which, with the advance of civilization, so enormously increases his ability to produce wealth. — The Science of Political Economyunabridged: Book III, Chapter 11, The Production of Wealth: The Office of Exchange in Productionunabridged Chapter 9, The Office of Exchange in Production

THEY who, seeing how men are forced by competition to the extreme of human wretchedness, jump to the conclusion that competition should be abolished, are like those who, seeing a house burn down, would prohibit the use of fire.

The air we breathe exerts upon every square inch of our bodies a pressure of fifteen pounds. Were this pressure exerted only on one side, it would pin us to the ground and crush us to a jelly. But being exerted on all sides, we move under it with perfect freedom. It not only does not inconvenience us, but it serves such indispensable purposes that, relieved of its pressure, we should die.

So it is with competition. Where there exists a class denied all right to the element necessary to life arid labor, competition is one-sided, and as population increases must press the lowest class into virtual slavery, and even starvation. But where the natural rights of all are secured, then competition, acting on every hand — between employers as between employed, between buyers as between sellers — can injure no one.

On the contrary it becomes the most simple, most extensive, most elastic, and most refined system of co-operation that, in the present stage of social development, and in the domain where it will freely act, we can rely on for the co-ordination of industry and the economizing of social forces.

In short, competition plays just such a part in the social organism as those vital impulses which are beneath consciousness do in the bodily organism. With it, as with them, it is only necessary that it should be free. The line at which the state should come in is that where free competition becomes impossible — a line analogous to that which in the individual organism separates the conscious from the unconscious functions. There is such a line, though extreme socialists and extreme individualists both ignore it. The extreme individualist is like the man who would have his hunger provide him food; the extreme socialist is like the man who would have his conscious will direct his stomach how to digest it. — Protection or Free Trade, chapter 28 econlib


IMAGINE an aggregation of men which it was attempted to secure by the external direction involved in socialistic theories that division of labor which grows, up naturally in society where men are left free. For the intelligent direction thus required an individual man or individual men must be selected, for even if there be angels and archangels in the world that is invisible to us, they are not at our command. Taking no note of the difficulties which universal experience shows always to attend the choice of the depositories of power, and ignoring the inevitable tendency to tyranny and oppression, of command over the actions of others, simply consider, even if the very wisest and best of men were selected for such purposes, the task that would be put upon them in the ordering of the when, where, how and by whom, that would be involved in the intelligent direction and supervision of the almost infinitely complex and constantly changing relations and adjustments involved in such division of labor as goes on in a civilized community. It is evidently as much beyond the ability of conscious direction as the correlation of the processes that maintain the human body in health and vigor is beyond it. — The Science of Political Economy unabridged: Book III, Chapter 10, The Production of Wealth: Cooperation — Its Two Kindsabridged: Part III, Chapter 8, Cooperation: Its Two Kinds

THE ideal of socialism is grand and noble; and it is, I am convinced, possible of realization, but such a state of society cannot be manufactured — it must grow. Society is an organism, not a machine. It can only live by the individual life of its parts. And in the free and natural development of all the parts will be secured the harmony of the whole. — Progress & Poverty — Book VI, Chapter 1, The Remedy: The Insufficiency of Remedies Currently Advocated; V.—From Governmental Direction and Interference

SOCIALISM in all its phases looks on the evils of our civilization as springing from the inadequacy or in harmony of natural relations, which must be artificially organized or improved. In its idea there devolves on the State the necessity of intelligently organizing the industrial relations of men, the construction as it were of a great machine, whose complicated parts shall properly work together under the direction of human intelligence. — The Condition of Labor, an Open Letter to Pope Leo XIII 

IN socialism as distinguished from individualism there is an unquestionable truth — and that a truth to which (especially by those most identified with free-trade principles) too little attention has been paid. Man is primarily an individual — a separate entity, differing from his fellows in desires and powers, and requiring for the exercise of those powers and the gratification of those desires individual play and freedom. But he is also a social being, having desires that harmonize with those of his fellows, and powers that can only be brought out in concerted action. There is thus a domain of individual action and a domain of social action — some things which can best be done when each acts for himself, and some things which can best be done when society acts for all its members. And the natural tendency of advancing civilization is to make social conditions relatively more important, and more and more to enlarge the domain of social action. This has not been sufficiently regarded, and at the present time, evil unquestionably results from leaving to individual action functions that by reason of the growth of society and the developments of the arts have passed into the domain of social action; just as, on the other hand, evil unquestionably results from social interference with what properly belongs to the individual. Society ought not to leave the telegraph and the railway to the management and control of individuals; nor yet ought society to step in and collect individual debts or attempt to direct individual industry. — Protection or Free Trade, Chapter 28 econlib

THE primary purpose and end of government being to secure the natural rights and equal liberty of each, all businesses that involve monopoly are within the necessary province of governmental regulation, and businesses that are in their nature complete monopolies become properly functions of the State. As society develops, the State must assume these functions, in their nature co-operative, in order to secure the equal rights and liberty of all. That is to say, as, in the process of integration, the individual becomes more and more dependent upon and subordinate to the all, it becomes necessary for government, which is properly that social organ by which alone the whole body of individuals can act, to take upon itself, in the interest of all, certain functions which cannot safely be left to individuals. — Social Problems — Chapter 17, The Functions of Government

IT is not the business of government to make men virtuous or religious, or to preserve the fool from the consequences of his own folly. Government should be repressive no further than is necessary to secure liberty by protecting the equal rights of each from aggression on the part of others, and the moment governmental prohibitions extend beyond this line they are in danger of defeating the very ends they are intended to serve.— Social Problems — Chapter 17, The Functions of Government

ALL schemes for securing equality in the conditions of men by placing the distribution of wealth in the hands of government have the fatal defect of beginning at the wrong end. They pre-suppose pure government; but it is not government that makes society; it is society that makes government; and until there is something like substantial equality in the distribution of wealth, we cannot expect pure government. — Protection or Free Trade, Chapter 28 econlib

... go to "Gems from George"

Louis Post: Outlines of Louis F. Post's Lectures, with Illustrative Notes and Charts (1894)

Note 49: The primary error in all forms of socialism consists in ignoring the fact that Capital is but a product of labor and land; or what in effect is the same thing, in disregarding the necessary inference that land is the only implement of labor. Intelligent socialists insist that they do not ignore it; but that, while acknowledging land to be the primary implement of labor, they see in this only an abstract formula, having at the present stage of civilization no practical importance. Society, they urge, is impossible without Capital; and he who would live in society must have Capital, or be the slave of those who do have it. Therefore, they, argue, Capital is in the social state as indispensable as land. Their reasoning hinges upon the mistaken assumption that Capital is an accumulation of the past instead of being a product of the present. As one socialistic author puts it, "Though labor may originally have preceded Capital, yet it is now as absurd to place one before the other as it is to attempt to say whether the hen originates the egg or the egg the hen." The explanation of division of labor and trade. the effect of which is overlooked by socialistic philosophies, affords a better opportunity than the present for considering this elementary error of socialism, and a brief discussion of the subject will be given in that connection. See post, note 81. ...

Note 81: People with socialistic tendencies argue that while it is true that Labor and Land are the only things necessary in primitive conditions, Capital also is necessary in civilized conditions. (See ante, notes 49 and 58.) And they want to know, with something like a sneer, what clerks and mechanics and bookkeepers and other specialists in our highly organized industry would do with land even if it were freely open to them. "They don't know how to make food, and they can't eat sand!" I once heard a socialist exclaim. The same notion is widespread among that large class of single tax opponents in church and college, whom the late Wm. T. Croasdale described as "people who believe in socialism, but don't believe in putting it into practice."

The idea is best expressed perhaps by a writer of the most brilliant socialistic verses, Charlotte Perkins Stetson, in the following :

"Free land is not enough. In earliest days
When man, the baby, from the earth's bare breast
Drew for himself his simple sustenance,
Then freedom and his effort were enough.
The world to which a man is born to-day
Is a constructed, human, man-built world.
As the first savage needed the free wood,
We need the road, the ship, the bridge, the house,
The government, society, and church, —
These are the basis of our life to-day
As much necessities to modern man
As was the forest to his ancestor.
To say to the newborn, 'Take here your land;
In primal freedom settle where you will,
And work your own salvation in the world
Is but to put the last-come upon earth
Back with the dim fore-runners of his race,
To climb the race's stairway in one life
Allied society owes to the young—
The new men come to carry on the world—
Account for all the past, the deeds, the keys,
Full access to the riches of the earth.
Why? That these new ones may not be compelled
Each for himself to do our work again ;
But reach their manhood even with to-day,
And gain to-morrow sooner.
To go on,—
To start from where we are and go ahead
That is true progress, true humanity."—In This Our World.

If one man were turned loose alone upon the earth, or shut off from trading with his fellows, it might in great degree be true, as Mrs. Stetson says, that he would be put "back with the dim forerunners of his race, to climb the race's stairway in one life"; but her criticism does not apply to millions of free men who freely trade. To them the land would be enough. Even though they were denied existing roads and ships and bridges and houses, they would soon make new ones, and starting "from where we are," would "go ahead." For free land means access to all natural materials and forces, and free trade means unobstructed industrial intercourse between laborer and laborer. These are the essential conditions, the only conditions, of all production — even of the most civilized.

The root of the socialistic idea is the thought that we are dependent for social life upon accumulated capital. This is a mistake. Social life depends, not upon accumulated capital, but upon accumulated knowledge made effective by interchange of labor. A laborer who operates some great machine seems to be dependent upon the owner of his machine for opportunity to work; but the only people upon whom he really depends are laborers who are competent co-operatively to make such machines, and who have access to both the land from which the materials must be drawn and that upon which they must group themselves while doing the work. When socialists lay stress upon the importance of accumulated capital they are attributing to accumulated capital the power that resides in land and trade; for to control these is to command the benefits of accumulated knowledge.

Since the production of a machine precedes its use, the inference is almost irresistible, upon a superficial consideration, that opportunities to labor and compensation for labor are governed by the existing supplies of machinery to which labor is allowed access. But this is of a piece with the old notion of classical political economy that opportunities to labor are dependent upon the existing supplies of subsistence that are devoted to the maintenance of laborers. The inference is wrong in either form. When we once grasp the essential truth of the law illustrated in the text, that the production of subsistence, or machinery, or any other unfinished object, that is to say, of Capital, is but a form of general wealth production, and that all forms of wealth production are in obedience to demand, we clearly see that labor is in no respect dependent upon capital either for employment or compensation. In the social as in the solitary state, Labor and Land are the only factors of wealth production. It is not Capital but Land that supplies materials to Labor for its subsistence and its machinery. Instead of capitalists supplying laborers with subsistence and machinery, laborers themselves continuously produce subsistence and machinery from the materials that land supplies. Capitalists neither employ nor pay laborers; laborers employ and pay one another.

Read "Progress and Poverty," book i, chs. iii, iv, and v. Also read "The Story of My Dictatorship" (No. 4, Sterling Library), chs. v, vi, vii, and viii. ...

c. Significance of the Upward Tendency of Rent

Now, what is the meaning of this tendency of Rent to rise with social progress, while Wages tend to fall? Is it not a plain promise that if Rent be treated as common property, advances in productive power shall be steps in the direction of realizing through orderly and natural growth those grand conceptions of both the socialist and the individualist, which in the present condition of society are justly ranked as Utopian? Is it not likewise a plain warning that if Rent be treated as private property, advances in productive power will be steps in the direction of making slaves of the many laborers, and masters of a few land-owners? Does it not mean that common ownership of Rent is in harmony with natural law, and that its private appropriation is disorderly and degrading? When the cause of Rent and the tendency illustrated in the preceding chart are considered in connection with the self-evident truth that God made the earth for common use and not for private monopoly, how can a contrary inference hold? Caused and increased by social growth, 97 the benefits of which should be common, and attaching to land, the just right to which is equal, Rent must be the natural fund for public expenses. 98

97. Here, far away from civilization, is a solitary settler. Getting no benefits from government, he needs no public revenues, and none of the land about him has any value. Another settler comes, and another, until a village appears. Some public revenue is then required. Not much, but some. And the land has a little value, only a little; perhaps just enough to equal the need for public revenue. The village becomes a town. More revenues are needed, and land values are higher. It becomes a city. The public revenues required are enormous, and so are the land values.

98. Society, and society alone, causes Rent. Rising with the rise, advancing with the growth, and receding with the decline of society, it measures the earning power of society as a whole as distinguished from that of the individuals. Wages, on the other hand, measure the earning power of the individuals as distinguished from that of society as a whole. We have distinguished the parts into which Wealth is distributed as Wages and Rent; but it would be correct, indeed it is the same thing, to regard all wealth as earnings, and to distinguish the two kinds as Communal Earnings and Individual Earnings. How, then, can there be any question as to the fund from which society should be supported? How can it be justly supported in any other way than out of its own earnings?

If there be at all such a thing as design in the universe — and who can doubt it? — then has it been designed that Rent, the earnings of the community, shall be retained for the support of the community, and that Wages, the earnings of the individual, shall be left to the individual in proportion to the value of his service. This is the divine law, whether we trace it through complex moral and economic relations, or find it in the eighth commandment.

... read the book

 

William F. Buckley, Jr.  Henry George and the Single Tax  (on C-SPAN's Book Notes)

Anyway I've run into tons of situations where I think the Single-Tax theory would be applicable. We should remember also this about Henry George, he was sort of co-opted by the socialists in the 20s and the 30s, but he was not one at all. Alfred J. Nock's book on him makes that plain. Plus, also, he believes in only that tax. He believes in zero income tax.

Robert V. Andelson  Henry George and the Reconstruction of Capitalism
With the fall of the Iron Curtain, people all over the world seem to be searching for a "Middle Way." ...

But what we are presented with, from Right to Left, is not a coordinated structure embodying the best elements from both sides, not even a well-thought-out attempt at syncretism, but rather a bewildering welter of jerry-built solutions, each one based on political and emotional considerations and lacking any functional relationship to a unified system of socio-economic truth -- let alone any rootage in a grand scheme of teleology or ethics.

A little Socialism here, and a little Capitalism there; a concern for the public sector here, and a concession to the profit motive there; a sop to the "underprivileged" here, and a bow to incentive there - put them all together, and what have you got? Nothing but a great big rag-bag, a haphazard pastiche of odds and ends without any bones and without any guts!

Nevertheless, there is a Middle Way. There is a body of socio-economic truth which incorporates the best insights of both Capitalism and Socialism. Yet they are not insights that are artificially woven together to form a deliberate compromise. Instead, they arise naturally, with a kind of inner logic, from the profound ethical distinction which is the system's core. They arise remorselessly from an understanding of the meaning of the commandment: "Thou shalt not steal." This Middle Way is the philosophy associated with the name of Henry George.

I like to picture economic theory as a vast jigsaw puzzle distributed across two tables, one called Capitalism and the other, Socialism. But mingled with the genuine pieces of the puzzle are many false pieces, also distributed across both tables. Most of us are either perceptively limited to one table, or else we are unable to distinguish the genuine pieces from the false. But Henry George knew how to find the right pieces, and, therefore, he was able to put the puzzle together -- at least in its general outlines. I don't claim that he was infallible, or that there isn't further work to be done. Yet if I find a little piece of puzzle missing here or there, it doesn't shake my confidence in the harmony of the overall pattern he discerned. It doesn't make me want to sweep the puzzle onto the floor and start all over again from scratch.

Henry George was born in 1839 in Philadelphia, and died in 1897 in New York City. It was in the San Francisco of the 1870s that he wrote his masterwork, Progress and Poverty ...

Among books of nonfiction, its sale was for many decades exceeded only by the Bible. At Oxford University, in the English literature department, it is used as a model of the finest prose. ...

His genius has been glowingly acknowledged by such renowned figures as philosophers John Dewey and Mortimer J. Adler, presidents Woodrow Wilson and Dwight D. Eisenhower, scientists Alfred Russel Wallace and Albert Einstein, essayists John Ruskin and Albert Jay Nock, jurists Louis D. Brandeis and Samuel Seabury, columnists William F. Buckley and Michael Kinsley, and statesmen Winston Churchill and Sun Yat-sen. These names cover the entire political spectrum from Conservative to Liberal, yet all of them saw something of immense value in George's thought. ...

For a long time, it was the fashion among academic economists to ignore or patronize Henry George -- whether for his lack of formal credentials, for his propensity to mingle moral arguments with economic ones, or for other perceived intellectual crimes even more monstrous. Today, this is becoming less and less the case, although, of course, there were honorable exceptions from the outset. But now we find economists of every stripe, including at least four Nobel laureates, united in agreement that George has much to say that is of vital contemporary importance. The list is far too long to read in its entirety, but it includes such names as Gary Becker, Kenneth Boulding, James Buchanan, Milton Friedman, Mason Gaffney, Lowell Harriss, Alfred Kahn, Arthur Laffer, Franco Modigliani, Warren Samuels, Robert Solow, James Tobin, and William Vickrey -- the last of whom served recently as president of the American Economic Association.

In the preface to the fourth edition of Progress and Poverty, Henry George wrote: "What I have done in this book, if I have correctly solved the great problem I have sought to investigate, is to unite the truth perceived by the school of [Adam] Smith and Ricardo to the truth perceived by the schools of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism..." Let us return now to our illustration of the economic jigsaw puzzle, and take a look at the pieces which he selected from the two tables of Capitalism and Socialism.

We will begin with the Capitalist table. George considered himself a purifier of Capitalism, not its enemy. He built upon the foundations laid by the classical economists. The skeleton of his system is essentially Capitalist. In fact, Karl Marx referred to George's teaching as "Capitalism's last ditch." George believed in competition, in the free market, in the unrestricted operation of the laws of supply and demand. He distrusted government and despised bureaucracy. He was no egalitarian leveler; the only equality he sought was equal freedom of opportunity. Actually, what he intended was to make free enterprise truly free, by ridding it of the monopolistic hobbles which prevent its effective operation.

In his book, The Condition of Labor, George said: "We differ from the Socialists in our diagnosis of the evil, and we differ from them in remedies. We have no fear of capital, regarding it as the natural handmaiden of labor; we look on interest in itself as natural and just; we would set no limit to accumulation, nor impose on the rich any burden that is not equally placed on the poor; we see no evil in competition, but deem unrestricted competition to be as necessary to the health of the industrial and social organism as the free circulation of the blood is to the bodily organism — to be the agency whereby the fullest cooperation is to be secured."

Why did George take so many pieces from the Capitalist table? Because, I think, they are all corollaries of one big piece, namely, the moral justification for private property. ...  Read the whole article

Upton Sinclair: The Consequences of Land Speculation are Tenantry and Debt on the Farms, and Slums and Luxury in the Cities

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 longer 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 their mortgages. 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.

This condition wrecked every empire in the history of mankind, and it is wrecking modern civilization. One of the first to perceive this was Henry George, and he worked out the program known as the Single Tax. Let society as a whole take the full rental value of land, so that no one would any longer be able to hold land out of use. So the value of land would decrease, and everyone could have land, and the community would have a great income to be spent for social ends. ...

In Philadelphia, as in all our great cities, are enormously wealthy families, living on hereditary incomes derived from crowded slums. Here and there among these rich men is one who realizes that he has not earned what he is consuming, and that it has not brought him happiness, and is bringing still less to his children. Such men are casting about for ways to invest their money without breeding idleness and parasitism. Some of them might be grateful to learn about this enclave plan, and to visit the lovely village of Arden, and see what its people are doing to make possible a peaceful and joyous life, even in this land of bootleggers and jazz orchestras. ... read the whole article

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.

Socialism may well be inspired by noble ideals, but in terms of economic policy it has been an unmitigated failure. Not that it is necessarily undemocratic, but a command economy requires a large bureaucracy with its attendant inefficiencies and corrupting centralisation of power. Rent-seeking speculators have little chance to do their stuff, true, but neither do ordinary people. There is no economic incentive to work harder or better and, in any case, the markets that might quickly adopt new products and processes don't exist.

Another blunder of socialism (and especially communism) is the failure to examine the source of property - the dictate that all property should be socialised fails to differentiate between what is earned and what is unearned. Again, Geonomics says that any confiscation of privately created wealth, whether by taxation or by private monopoly, is plain theft.

NO ROYALISTS, ARE WE!
In general, Geonomists support a free and fair market with governments mainly stepping in to prevent unacceptable environmental damage (which eco-taxes would largely prevent) and unfair trading practices (particularly the formation of monopolies and cartels). In this sense we could be called libertarians of a sort, but often apply the distinguishing (and pejorative!) label of royalist to conventional libertarians who effectively condone the privileges of land monopoly capitalism.

It should be pretty clear by now that Geonomics doesn't fit on the conventional left-right spectrum. It's the Third Way - and the only sustainable one at that. ... Read the entire article

Judge Samuel Seabury: An Address delivered upon the 100th anniversary of the birth of Henry George

WE are met to celebrate the 100th anniversary of the birth of Henry George. We meet, therefore, in a spirit of joy and thanksgiving for the great life which he devoted to the service of humanity. To very few of the children of men is it given to act the part of a great teacher who makes an outstanding contribution toward revealing the basic principles to which human society must adhere if it is to walk in the way which leads to freedom. This Henry George did, and in so doing he expressed himself with a clarity of thought and diction which has rarely been surpassed. ...

Henry George's teachings involved more than the prescription of specific remedies for particular evils. The specific remedies which he proposed were means to an end. The end was the philosophy of freedom as applied to human relations. I do not say that the majority of the people of the world have given acceptance to many of his most important teachings. Indeed, in view of the world tendency since his death to aggrandize the powers of the political state and limit and subordinate the power of the people, it is self-evident that in this environment the principles of Henry George could not have won general acceptance. Had they done so, the world would have made greater progress toward the attainment of the goal of human freedom and economic contentment which is still the unrealized aspiration of humanity.

Moreover, many who have believed in the necessity for basic social changes preferred to ignore the simple and fundamental teachings of Henry George, and to adopt, instead, the philosophy of Marx and Lenin. It is the wide acceptance of the doctrines of these false prophets which has contributed to making the economic condition of the masses worse, has reduced their standard of living and has made of Europe an armed camp. It is their disciples who are now attempting to introduce here the political and economic theories which in other countries have culminated in the totalitarian state, together with the host of iniquities which are inseparably connected with it. ... read the whole speech

Lindy Davies: Socialism, Capitalism and Geoism

It may seem odd that both "capitalists" and "socialists" speak of the justice of their system and the vile in-justice of their opponents'. (Of course, the emotion behind such discussions is often heightened by a kind of home-team fervor.) Is there any universal standard of justice upon which economic policy can be based?

The answer lies in clarifying the question of the rightful basis (if there is one) of public vs. private ownership. For the thorough-going free-market capitalist, "public ownership" of anything is anathema: the community's interests are best served by the unhindered interactions of self-interested producers and traders. But the poverty, suffering and environmental destruction that come under such a "private property" regime cannot be denied. Because of this, the great bulk of social-policy debate revolves around how much of the efficiency of free enterprise must be traded for public interference, imposed in the name of equity. The question of the rightful balance between public and private control becomes one of expediency and political fashion, lacking any guiding principle. Indeed, modern "neoclassical economics" denies that any such principle exists.

For Henry George, however, the principle was clear. The value of natural opportunities belongs entirely to the community, and the production of wealth by labor, using capital, should be entirely unhindered by the penalty of taxation. For George, the most important question was not the amount of wealth that should be taken by the community, but the kind of wealth that should rightfully go to the community, because it is a value that the community has created.

In recent years, this understanding of the distinctive character of natural opportunity (land) as a factor of production has led to the coining of a new term: Geoism, indicating a philosophy based on the rightful understanding of the place of the Earth (Geo-) in economic life. Read the whole article

Clarence Darrow: The Land Belongs To The People (1916)

... Now, there are some methods of getting access to the earth which are easier than others. The easiest, perhaps, that has been contrived is by means of taxation of the land values and land values alone; and I need only say a little upon that question. One trouble with it which makes it almost impossible to achieve, is that it is so simple and so easy. You cannot get people to do anything that is simple; they want it complex so they can be fooled.

Now the theory of Henry George and of those who really believe in the common ownership of land is that the public should take not alone taxation from the land, but the public should take to itself the whole value of the land that has been created by the public — should take it all. It should be a part of the public wealth, should be used for public improvements, for pensions, and belong to the people who create the wealth — which is a strange doctrine in these strange times. It can be done simply and easily; it can be done by taxation. All the wealth created by the public could be taken back by the public and then poverty would disappear, most of it at least. The method is so simple, and so legal even — sometimes a thing is legal if it is simple — that it is the easiest substantial reform for men to accomplish, and when it is done this great problem of poverty, the problem of the ages, will be almost solved. We may need go farther.

Henry George said, in "Progress and Poverty" that while the land tax may not bring about the dream of the socialist, it would still prepare the way for that — or for any dream. ... read the whole article

Mason Gaffney: Privatizing Land Without Giveaway

Some of our unresolved problems today include

  • rising homelessness, the counterpart of low affordability of housing. This problem persists in spite of massive subsidies and tax breaks for housing that make America "overhoused" next to, say, Japan.
  • Unemployment persists.
  • Income and especially wealth are distributed with increasing inequality.
  • American industry grows obsolescent faced with foreign competition: replacement is too slow, as in later 19th Century Britain. Britain then at least saved and exported capital, but America's net domestic capital formation is dangerously weak, leading to capital imports and alienation of American wealth.
  • Real wage rates are level or falling.
  • Crime rates are frightening, with many Americans choosing to live in an underground economy.
  • Anomie and substance abuse are everywhere.
  • National security hangs on precarious foreign oil.
  • A large piece of our financial system has just collapsed, and the rest looks shaky.

There is much to be humble and concerned about.

Western capitalism has shown the world that "personal interest is the irreplaceable motive power of production and progress." Let us trumpet this showing with pride, and preach to the world. Let us also allow that personal interest can, if badly handled, lead to inhumane excesses and abuses. A worthy goal is to combine capitalist drive and efficiency with socialist egalitarianism. How? Synthesis does not mean some vaguely compromising "middle way," but the best constructive combination of workable elements from each way. The specific centerpiece of policy proposed here is social collection of land rent, coupled with private collection and retention of incomes drawn from labor and from creating capital.   Read the whole article


Mason Gaffney: The Taxable Surplus of Land: Measuring, Guarding and Gathering It
1. Common Property in Land is Compatible with the Market Economy.
2. The Net Product of Land is the Taxable Surplus
A. To socialize the taxable surplus, land rent, effectively, you must define and identify it carefully, and structure your taxes to home in on it.
B. Taxable surplus is also what you can tax without driving land into the wrong use.
C. To tax rent we must be sure there is rent to tax, and we must adopt public policies to husband and maximize it, and avoid policies that lower and dissipate it.
i. Avoid "perverse subsidies."
ii. Avoid letting lessees of public land conceal their revenues.
iii. Avoid letting lessees or taxpayers pad their costs to understate their net revenues.
iv. Avoid dissipating rent by allowing open access to resources like fisheries,
v. Avoid trying to distribute rents to consumers by capping prices below the market.
D. Raising output by removing tax bias
E. Maximizing public revenue.
F. Sustaining the tax base
3. Taxing the Net Product of Land Permits Untaxing Labor
4. Taxing the Net Product of Land Permits Untaxing Capital
5. Taxing the Net Product of Land Provides Ample Public Revenues: a Master Solution to Many Problems
A. Public revenues will support the ruble.
B. Your public credit will, of course, recover to AAA rating when lenders see that there is a strong flow of revenue to pay public debts.
C. Never again need you bend to any "advice" or commands from alien lenders, nor endure patronizing, humiliating homilies from alien bankers, nor beg any foreign power for aid.
D. If you again feel the need (as I hope you will not) to rebuild your military, you will of course require strong revenues.
E. Strong national revenues are required to unite Russia, and keep it one nation.
Summary

1. Common Property in Land is Compatible with the Market Economy.
You can enjoy the benefits of a market economy without sacrificing your common rights to the land of Russia. There is no need to make a hard choice between the two. One of the great fallacies that western economists and bankers are foisting on you is that you have to give up one to enjoy the other. These counselors work through lending and granting agencies that seduce you with loans and grants to learn and accept their ideology, which they variously call Neo-Classical Economics, or "monetarism," or "liberalization." It is glitter to distract you and pave the way for aliens to acquire and control your resources. 

To keep land common while shifting to a market economy, you simply use the tax system. Taxation is the form that common property takes in a monetary, market-oriented economy. To tax is to socialize. It's then just a simple question of what you will socialize through taxation, and how; but in the answers lie success or failure.

Not only can you have both common land and free markets, you can't have one without the other. They go together, like love and marriage. You need market prices to help identify land's taxable surplus, which is the net product of land after deducting the human costs of using it. At the same time, you must support government from land revenues to have a truly free market, because otherwise you will raise taxes from production, trade, and capital formation, interfering with free markets. If you learn this second point, and act on it, you will have a much freer market than any of the OECD nations that now presume to instruct you, and that are campaigning vigorously to make all nations in the world "harmonize" their taxes to conform with their own abysmal systems.

The very people who gave us the term laissez-faire -- the slogan at the core of a free market economy -- made communizing land rents a central part of their program. These were the French economistes of the 18th Century, sometimes called "Physiocrats," who were the tutors of Adam Smith, and who inspired land reforms throughout Europe. The best-known of them were François Quesnay and A.R. Jacques Turgot, who championed land taxation. They accurately called it the "co-proprietorship of land by the state."
   
Since their time we have learned to measure land values, and we have broadened the meaning of "land" to comprise all natural resources. Agrarians will be relieved, and may be surprised, that farmland ranks well down the list in terms of total market value. Thus, a land tax is not primarily a tax on farms; only the very best soils in the best locations yield much taxable surplus.  ... 

Another natural resource (hence part of "land"), whose nature and value the mass of people are only slowly realizing, is the radio spectrum. In this age of communication its value is vaulting skywards even faster than the rockets launching the satellites that direct and relay signals through the spectrum. Each satellite requires a spectrum assignment, or it is nothing but space junk. One minor American entrepreneur, Craig McCaw, collected a bundle of spectrum rights for cell phones, and a few years ago sold them to AT&T for $12 billions. Then Mr. McCaw went partners with Bill Gates, perhaps the richest American, in a firm called Teledesic, to launch hundreds of satellites and amass radio spectrum rights around the entire world, including your part of the world, in the hope of dominating worldwide communications. Radio spectrum is a natural resource, and it belongs to the government, even in the capitalistic U.S.A. When Teledesic comes calling, under the auspices of our Vice President Al Gore, don't sell anything cheap! In fact, don't sell anything at all, but lease it for a limited time, so you may gain from future rises in value. And don't stint on the professional help you should hire to protect your interests: these lease contracts are complex, and are worth Billions if you play your cards right.
   
Hydrocarbons are a third set of valuable resources. The values involved are gigantic. The recent merger of the Exxon and Mobil oil firms was valued at $260 billions, several times greater than the Russian annual budget. Why should private parties make off with all this natural value?...
  
The American state of Alaska holds down its other taxes by socializing part of its oil revenues, which otherwise would inure to a handful of the major stockholders of two corporations (ARCO and BP). Alaska not only holds down other taxes, it pays each resident - man, woman, and child - a social dividend of over $1,000 per year. Go thou and do likewise. ...

Many third-world nations like Venezuela or Nigeria have fabulous mineral oil that they fail to exploit for their own people, letting sophisticated or ruthless foreign corporations, in tandem with weak or corrupt insiders, reap the gains. The question for Russia is whether to follow their bad example and become a poor resource-colony of the west, or whether to assert your own sovereignty over your own resources for the benefit of your own people. You need look no further than Norway for a model.
   
Other subsoil resources have great value, too.  ...  Russia is a treasure-house of untapped mineral wealth that you can and should tax to alleviate the condition of the Russian people.
   
In arid lands, water is life, and the most valuable natural resource is water.  ...
 
Another value from water is to generate power.  ... Again, California witlessly fails to socialize this value, but Canada, our northern neighbor, has shown the way. 
 
Fisheries are another source of value.  In the past most nations have let this rent be "dissipated" by overfishing. In recent years the U.S. and Canada have in effect "privatized" fishing in their offshore waters by limiting the number of licenses and boats. This limitation was needed and desirable, overall. It created large rents, where previously there were little or none, by preventing overfishing and the great waste of duplicate, triplicate, and even quintuplicate fishing effort. That is a good example of husbanding and guarding rent, which is necessary before you can collect it. It was not necessary or desirable, however, to give away this net benefit to private parties.
 
The government did not sell these licenses, but simply gave them away to owners of existing boats, and others with political influence. Each license now sells for something like a million dollars, creating a new class of instant millionaires and "parlor fishermen." This giveaway to the few, and takeaway from the many, created an instant class society where before there were equal access and equal opportunities.
 
These privileges are worth so much that there are now documented cases off Alaska where the parlor fisherman takes 70% of the total catch. The captain, the crew, and the owner of the boat, who do the work and bear the dangers and discomforts and financial risks of fishing, must get by with the other 30%. Parlor fishermen are simply leeches; these rents should be socialized, relieving the workers from taxes. ...

Avoid "perverse subsidies." These are subsidies that encourage harmful things like
  • polluting air and water,
  • wasting water,
  • cutting timber whose value is less than the cost of logging, or
  • populating remote regions whose costs exceed the benefits derived.
Cape Breton Island, the northern tip of Nova Scotia, contains the most polluted area in Canada thanks to years of subsidies to sustain its uneconomic, obsolescent coal and steel industries that employ just a few people by fouling one of the most scenic jewels in North America.  ...
     
Perverse subsidies like those are unspeakably foolish and wasteful. They "dissipate rent" so there is none left to tax.   Read the entire article


Nic Tideman:  The Political Economy of the Gospels

The message of the Gospels is that our sins are forgivable, that death is not to be feared because our true lives are spiritual rather than physical, and that participation in the kingdom of God -- a new and better life in this world as well as the next -- is accessible to all who orient themselves to God.

Drawing on the Old Testament, Jesus taught that our first commandment is that we love God with all our heart, and all our soul, and all our mind, and all our strength, and that our second commandment is that we love our neighbor as ourselves.1 When asked who our neighbor is, he replied with the parable of the good Samaritan, implying that anyone we encounter is our neighbor. 2 Jesus taught an ethic in which there are no bounds on our obligations to others:  ...

When asked by Peter, "Lord, how oft shall my brother sin against me, and I forgive him? till seven times?" Jesus replied, "I say not unto thee, Until seven times: but, Until seventy times seven."  In other words, we are to forgive indefinitely.

This unbounded obligation to others is reconciled with the need to survive through the introduction of the idea that it is not through our own anxious efforts, but through God's provision for us that we survive: ...

The message of the Gospels denies the validity of concern for material scarcity. This is made particularly clear in the accounts of the feeding of the multitudes with just a few loaves and fishes.

comprehending this counterintuitive idea, that material scarcity is not to concern us, is brought out by the accounts of how even Jesus' disciples did not understand the message: ...

Without a concept of material scarcity it is difficult to construct an economic theory, as material scarcity is central to economic theory. And yet, even without a concept of material scarcity there is an allocation problem to be solved--the allocation of our efforts.

In the parable of the talents we are told that we will be expected to accomplish something with the resources that are put into our hands. 8 This parable is followed in Matthew by a teaching that may be taken as an indication of what constitutes accomplishment: ...

In other words, every person is a manifestation of God, and anything that we can do to help anyone is to our credit. There is thus an unlimited task for each of us. No one of us will ever be able to say, "I have done every last thing that might be required of me. I have no further obligations." But neither are we to be concerned that that which we have left undone might be held against us. For if we refrain from judging others, we ourselves will not be judged:  ...

With this message of the Gospels in mind, turn now to the problem of political economy, the problem of what principles ought to govern the organization of the production of goods and their distribution.

One might first ask whether the requirement that we abandon concern for scarcity would preclude production. The answer is no, it is not production that we are cautioned to avoid, but anxiety. There are any number of reasons why we might allocate some of our time to production, without being anxious about our own material requirements. We feel called to undertake a particular kind of work, so we do it, trusting that any material needs we may have will be satisfied. If we want to undertake our productive activities in conjunction with others, that's fine, too. Associating with others provides us with opportunities to be useful to them.

Among those who are close to us there is no need for prices and markets, because we can see easily enough how we can be of service to them. But human discernment is limited, and prices and markets help us to be aware of what is valued by people who are less close to us. ...

Refraining from the use of force is a recurring theme in the political economy of the Gospels. We are called to refrain from the use of force in defense of property. We are called to refrain from the use of force in financing public activities. We are called to refrain from the use of force in providing for those who might otherwise lack. And we show our love for those who do not wish to participate in our political economy by leaving for them the same per capita value of land and natural resources that we claim for ourselves.

Consider now how this framework bears on some traditional questions of economic ethics. Take first the problem of the just price. This simply is not an issue. If two people have the opportunity to trade--to cooperate--on terms that are mutually agreeable to the two of them, it is not for us to say that they ought to be trading on other terms. Between people who love one another, the problem of settling on the terms of trade is no more difficult than the problem when friends eat lunch together of deciding who will pick up the tab, or how it will be split.

That those outside a relationship are not called upon to prescribe its terms is supported by a passage from Luke: ...

Relations between employers and employees are a special case of relations between traders. ...
The problem of worker management is not a problem either. ...

Corporate responsibility may be more of an issue for a Gospel-based political economy. The corporate form of organization permits us to participate in the establishment and management of firms while knowing very little about the other people with whom we are involved or the actions that are taken on our behalf. If this leads us to support implicitly actions of managers in their concern for the bottom line that we could not in good conscience take ourselves, then there is something troubling about our participation in corporations. We need to find ways of managing the resources under our control that do not lead us to endorse implicitly and to profit from actions that we would not endorse directly or take ourselves.

The grand question of economic ethics, the question of whether capitalism or socialism is the more appropriate form of political economy, is another non-question from the perspective of the Gospels. Everyone who wants to live under socialism should be free to live under socialism, and everyone who wants to live under capitalism should be free to live under capitalism. In whichever group we fall, we will want to insure that those who want to organize their lives by different principles of political economy have their share of land and natural resources with which to do so.

A political economy based on the Gospels is a political economy based on love. As the First Epistle of John says, "There is no fear in love; but perfect love casteth out fear."17 To construct a political economy of the Gospels we must be free of fear: free of fear that others may rob us; free of fear that others may not contribute to the provision of public goods or to provision for those who might otherwise lack; free of fear that our incomes will be too low or the prices we face too high; free of fear that if we don't do something, someone will be exploited. Only when love has replaced all fear in our hearts will we be able to construct the political economy of the Gospels. Read the whole article


Jeff Smith: What the Left Must Do: Share the Surplus

What would you do if you could work two days and take five off? Write? Play soccer? Tend to the community garden? Time off is an option made increasingly viable by our relentlessly rising rate of productivity. French Marxist and media critic Jean Baudrillard, while still advancing the interests of labor, implores the Left to move on from seeing humans as workers to seeing workers as human beings, with more needs than merely the material. Enabling people to live their lives more fully is an issue made to order for rescuing the Left from the doldrums that descended when “history ended”.

What would single mothers do with enough income to stay home? What would minorities do with the wherewithal to begin their own businesses? What would communities do if they did not leak resources up to an upper class and out to a distant lender or tax collector? What would the elite do without our commonwealth? The means to these ends is an extra income apart from labor or capital (savings), that is, a “social salary” from society’s surplus, a “Citizens Dividend” from all the rents, natural and governmental, that people pay for land and to the privileged, redirected to everyone equally.  Merely demanding a fair sharing of the bounty from nature and modern society would raise people’s self-esteem, a key component for political involvement. Actually receiving an income supplement would transform our lives and restructure society.

Unless humanity needs militarism, corporate welfare, and debt service, it’s fair to say most public revenue gets wasted. Demanding a dividend – similar to Alaska paying residents a share from oil royalties – forces a new dialog on spending priorities. Beyond arguing “bread not bombs,” a dividend replaces expenditures by politicians (necessarily influenced by donors) with spending by citizens, the people who generate the surplus in the first place. With a dividend, citizens get to see themselves as direct beneficiaries from reigning in the wild spending spree on imperial aggression, disloyal multinationals, and on “borrowing” money that never existed until “lent” by the Federal Reserve. ...

Demanding jobs rather than a fair share of society’s surplus implies that there is no commonwealth or that expropriating it by a few is OK. Neither is true. Rents are real, and they are ours. There is a free lunch (just ask the privileged), as those downing it do get money for nothing. And since society, not lone owners, generates these values, that flow of funds belongs to everyone.

The value of a parcel of land is initially based on the natural endowments of the location (“location, location, location”), created not by an owner but by whatever created all of us. Next, land value rises with the presence of society, and grows with the population of society. It’s highest where society is densest, in the city centers, typically 2000 times more valuable than sites in the boondocks. Land values as economic values disappear whenever society quits respecting one’s claim, as in a war zone; there, real estate offices nimbly shut down. And while land titles may be the holy grail of wannabe homeowners, they’re also the ticket to pocket unearned rent by absentee landlords, such as Donald Trump.

Making land public does not guarantee that the public end up with the rent. The public’s steward, the state, often lets public resources at “fire-sale” prices, unduly enriching Chevron, Arco, Kerr-McGee, Weyerhauser, etc. The state gifts enormously valuable licenses for TV, radio, and cell phones to GE, Disney, Time Warner, and Clear Channel. The metaphor, “field of knowledge”, lets us see patents and copyrights as flags; by excluding innovative outsiders, they not only skew techno-progress (thus addicting civilization to oil) but also enrich those few who can afford to corral them: GM, DuPont, and Microsoft. Similarly, a utility franchise lets AT&T pay investors, and Enron insiders, handsomely.  ...

That’s how great fortunes are made: by sloughing off private costs (which become “negative externalities”) while soaking up public benefits (some “positive externalities”). Land titles, corporate charters, and other privileges – mere pieces of paper – are worth trillions each year. The corporations – from the Federal Reserve to Exxon (both founded by the “oiligarchy”) – that receive these privileges make their owners rich or richer. Their wealth is not compensation for the exertions of either labor or capital, not profit in the market from output, but rent from present lobbying of legislatures or past conquest of others’ lands. Thus laws (“privilege” means “private law”) funnel multi-trillions of dollars each year from the many to the few.

Rentiers become the elite or rise higher up among the upper echelon, the puppeteers of our puppet state. Their ranks grow with every techno-advance that spurs a new monopoly and pushes up locational values. ...

Trillions are enough money that the present beneficiaries spend fortunes on electing their water boys to Congress and state legislatures. Why do public servants agree to let public assets go for peanuts? Partly out of habit, partly because the recipients contribute mightily to their political campaigns, but also.

Well, not exactly “always”. Once there was a powerful movement to shift taxes off wages, onto rents. It was not Marxism, eventho’ one of the first demands in the Communist Manifesto was to tax land (acknowledging the history of the enclosures of farmland which forced surplus labor to work cheap in the then new factories in cities). It was the movement of the Single Tax on land, spearheaded by Henry George.

George, author of the classic, Progress and Poverty (1879, in its day more popular than Das Kapital), was Labor’s candidate for the mayoralty of New York in 1886, an election he won but a victory he was denied by the machinations of Tammany Hall. Samuel Gompers (1850-1924), union organizer who campaigned for George, said,

"I believe in the Single Tax. I count it a great privilege to have been a friend of Henry George and to have been one of those who helped to make him understood in New York and elsewhere."
Whenever George’s followers convinced society to shift taxes off earnings, onto rents, that opened up opportunity. As collecting land rent knocks down land price, and as speculators turn into developers, and as formerly procrastinating governments become leasers, then the use of land rises. Using land requires labor, raising the demand for workers. More employment means higher wages. ...

As taxing land spurs employment, taxing labor and capital does just the opposite.
Taxing salaries makes it more expensive to hire people. Taxing earned profits makes it more expensive to invest in firms that hire people. If you want jobs, don’t tax them. Demanding jobs while taxing wages is irrational. When we tax (or in other ways reduce) one’s efforts, most people naturally produce less.  Less output not only shrinks private assets but also the formation of public assets downstream.


Unlike taxing earned incomes, which shrinks the pie, collecting rent grows the pie. While taxes on effort lessen the motivation to produce, charging people rent for what’s already been provided, by definition, does not diminish the motive to produce. Instead, recovering rent removes the private profit from speculating in land and resources. And once we redirect revenue from sweetheart deals (e.g., Pentagon contracts), tax breaks (e.g., depletion allowances), and subsidies (e.g., agri-business support) into a general dividend, then why bother currying favours from the state? Finding rent-seeking from both nature and the legislature less profitable, investors would turn to improving production: new technology and worker re-training, providing society more from less.

In The Nation, Robert Fitch ('90 Oct 29), author of The Assassination of New York (1993), stated,
"A tax levied on land used for commercial purposes is the ideal tax. It would fall on the richest families and institutions, it can't be shifted to consumers and owners can't move their property to another state. Almost invariably, if you tax something the capitalists will produce less of it and charge you more for it. But land is different.  Most of it was produced once and for all by God."

Increasing taxes, fees, or dues upon land, resources, and privileges won’t force firms to raise prices; the ones who try to will lose customers to those who don’t; in the end, all will have to settle for smaller profits. On the other hand, de-taxing labor and capital, by lowering overhead, lets firms lower the price of their products, while competition drives them to. The resultant lower cost of living – coupled with higher wages and the social salary – lets those with enough stuff work less, so those without enough stuff can work more.

Given the collateral damage by most taxes, the Left must make clear that the extra income is to come not from taxes upon people’s legitimate earnings but from rent, making it a social salary from society’s surplus. While opponents will cry “redistribution”, the Left can point out that sharing the commonwealth is actually “predistribution.” Acting like a REIT (Real Estate Investment Trust) for the public, government would merely recover and disburse rents before the elite or their friendly politicians have a chance to misspend society’s surplus.Read the whole article


Kris Feder: Progress and Poverty Today
...  Public debate about economic policy revolves today, as it always has, around a tension between two fundamental social goals. Economists and policymakers lament a perennial "trade-off between efficiency and equity." Policies intended to promote savings and capital formation are held to widen inequality, while redistributive policies (such as progressive income taxation) erode incentives to produce and earn. The debates about welfare reform and health care policy are the most recent versions of this enduring social debate. And the trade-off is encountered far beyond the borders of the United States. Citizens of formerly communist countries wonder whether the efficiency gains of a market economy are worth the social costs. Developed as well as developing countries agonize over the problem of how to promote economic growth without also accelerating the degradation of the environment.

Most economists deem it their business to evaluate the efficiency of policy choices, but, claiming no special knowledge of ethics, they leave it to philosophers and the political process to evaluate questions of justice. Can it be true that society's arrangements to provide for common needs must always confront a divisive choice between equity and efficiency - between what is fair and what is feasible?

Henry George not only denied it; he asserted the reverse: Full recognition of economic rights and responsibilities would reveal the goals of equity and efficiency to be mutually reinforcing. Neither social justice nor a well-functioning free market system can long be enjoyed without the other. "The laws of the universe are harmonious," George proclaimed. His analysis showed that the root cause of widening inequality lies not in the laws of nature, but in social maladjustments which ignore them. Moreover, the breach of justice which underlies the problem of poverty is not merely incidental to economic development; it impedes development, leading to wider and wider inequality.

George emphasized that unequal distribution is itself wasteful of wealth.

Unemployment and underemployment of labor mean that energy and intelligence go untapped. For those who find work, he said, high wages stimulate creativity, invention, and improvement, while low wages encourage carelessness. Inadequate education of the poor multiplies the loss. There are the damages done by poverty-related vice and crime, and the substantial costs of protecting society against them. There is the burden upon the wealthy of providing welfare support for the very poor - or risking social upheaval if they do not. Moreover, said George, social institutions by which some prosper at others' expense cause talent and resources to be diverted from productive enterprise to unproductive conflict, as individuals find that competing for political advantage can be more lucrative than competing for market success.

In short, an unjust system of privileges and entitlements tends to cause misallocation of resources, macroeconomic instability and stagnation, political corruption, and social conflict that ultimately may threaten whole civilizations.

George's central contribution was to show that the distinction between individual property and common property forms a rational basis for distinguishing the domain of public activity from that of the private. This distinction leads him to a theory of public finance that reconciles the competing insights of socialism and laissez-faire capitalism. By a simple fiscal device, the revenue arising from common property can be captured for the public treasury and applied to the common benefit, so that government may assume needed general functions without interfering with individual incentives.

  • The benefits of sustained economic development would be widely shared.
  • The limited resources of the earth would be managed for the benefit of all, including future generations.
  • Government would become, not a repressive power, but "the administration of a great cooperative society.
  • It would become merely the agency by which the common property was administered for the common benefit."

George's insights have wide application to modern problems. Both domestically and internationally, the distribution of wealth has grown more unequal. Europe, North America, and Japan have surged ahead while many poorer countries have stagnated or declined, many burdened by debt.

Modern fiscal and monetary policies have not resolved the problem of macroeconomic fluctuations. Yet a half century before Keynes, George outlined a theory of boom and bust which explained the underlying instability of the market economy under present fiscal institutions. The operation of a modern system of money and credit merely serves to intensify that instability. His theory is consistent with the circumstances of numerous episodes, recently including Japan's recession and halting recovery, and the savings and loan debacle in the United States.

Georgist (or "geoclassical") economic analysis

  • bears directly upon the current difficulties of Russia and other nations emerging from communism, upon the international debt crisis, and upon the world-wide pressure on environmental and natural resources.
  • It is relevant to the common experience of chronic budget deficits, both municipal and federal.
  • It can be applied to the problems of corruption in government, and of the concentration of political power associated with concentration of wealth.
  • It provides an ideal framework for the analysis of environmental pollution and the design of environmental policy.
  • Indeed, readers will notice that the modern environmental movement in certain respects seems to be grappling toward a rediscovery of Georgist proposals.

Many American cities are plagued by the twin problems of urban decay and suburban sprawl. An expanding network of roads and highways carries commuters ever farther to their jobs. Fleeing the problems of the city, citizens build new homes in the quiet countryside only to find that traffic congestion, pollution, noise and urban social problems are flung outward with the movement of population. Sociologists decry the loss of community, while environmentalists warn of the potentially disastrous consequences of automobile pollution, habitat loss, deforestation and ecosystem disruption. Economists point to the billions of dollars worth of wasted physical and human capital left behind in the crumbling central cities - where the urban poor remain stranded to fend for themselves, with few jobs and, as municipal tax revenues shrink, declining public services. Yet several years before the automobile appeared, Henry George analyzed the dynamics of urban growth and decay. He explained the basic processes that yield an inappropriate geographic distribution of population, inefficient land use, and urban blight. Enlightened urban economists and transportation planners today advocate Georgist policy reforms at the municipal level.

Thus, George's synthesis informs a research program of remarkable breadth. Some writers understand Georgism to constitute a distinct paradigm of political economy, one which reconciles the contradictions between the two competing paradigms dominant in the world today - the mainstream neoclassical school, which tends to focus on the impressive efficiency properties of free markets, and Marxist socialism. Other Georgist writers believe that Georgism can and should be explained in the modern language of neoclassical economics. What is certain is that geoclassical thought bears crucially on some of the foremost controversies in America and the world today.  Read the whole article


Tony Vickers: From Zee to Vee: using property tax assessments to monitor the economic landscape

The ‘real world’ in which human society exists is not confined to natural, physical phenomena. From earliest times, human beings have interacted socially and economically. As they do so, they have specialised and traded in goods and services which are the products of combinations of labour, capital, enterprise and the fourth – often forgotten but distinct – factor of all production: land.

Land comprises all natural resources, not just ‘terra firma.’ It is the universe minus man’s products. Even the simplest of human activities, sleep, requires each of us to occupy exclusively a space, a location, preferably a bed in a home of our own. But that word ‘own’ conjures emotions and political postures. ...

Property taxes have always been a major source of revenue for governments, especially local governments. Their relative importance declined around a hundred years ago, as classical economic theory was eclipsed by the still ruling neo-liberal or Washington orthodoxy and – for some seventy years – its formidable challenger Marxist socialism. Both Marxist and neo-liberal economists share the view that land is neither a factor distinct from capital nor important in an industrial age.

Land conjures up visions of rolling prairies or Constable landscapes, not skyscrapers or dark Satanic mills. Land reform was indeed characterised during the latter half of the nineteenth and early twentieth century in much of the now developed world by massive increases in landless rural and urban poor, as economies switched from subsistence agriculture to industrialised farming and then manufacturing. It also invariably incorporated calls for registration, sub-division and taxation of land. Henry George’s book Progress and Poverty massively out-sold Marx’ Das Capital and policies based on his Single Tax (on land values) achieved remarkable results as far apart as China, Japan, Chile, Australia, Denmark and the USA (Andelson, 2000). Between 1915 and 1975 the use of LVT was generally in steep decline, although many local jurisdictions that were given the choice to adopt it continued to do so. Taxes based on land-and-buildings, typically like the British rating system, also declined in relative importance. Nevertheless the vast majority of developed countries continue to value property for tax purposes and many assess land/site values separately from building values, even where they do not levy a land tax at a separate rate. There is some evidence that, with the collapse of Communism and the globalisation of capitalism, the importance of land as a source of public revenue may be increasing. This is because most other taxable entities are mobile and can with increasing ease escape the grasp of national – let alone local – treasuries. Location is local: it cannot be moved, hence a tax on the economic rent of land and other fixed natural resources cannot be evaded. Nor can it be passed on, as are taxes on wages and profits, to the consumer via the supply chain, thus adding to inflation.

Rent will remain with the owner unless and until recovered for the community that created it, through taxation. On the other hand, economies competing for the active agents of production – capital and labour – are engaged in a ‘race to the bottom’ of lower tax rates on corporations and high-paid individuals. Governments wishing to invest in public services are finding the most secure source of revenue is the property tax. And within the range of possible property taxes, studies have shown that cities which shift taxes off buildings onto land values out-compete those who do not (Plassman & Tideman, 1999; Hartzok, 1997).Read the whole article

Henry George: The Wages of Labor

There are many who, feeling bitterly the monstrous wrongs of the present distribution of wealth, are animated only by a blind hatred of the rich and fierce desire to destroy existing social adjustments. This class is indeed only less dangerous than those who proclaim that no social improvement is needed or is possible.

The Socialists, as I understand them, and as the term has come to apply to anything like a definite theory, do not seek the abolition of all private property. Those who do this are properly called Communists.

The Socialists seek the assumption by the State of capital (in which they vaguely and erroneously include land), or, more properly speaking, of large capitals, and State management and direction of at least the larger operations of industry. In this way they hope to abolish interest, which they regard as a wrong and an evil; to do away with the gains of exchangers, speculators, contractors, and middlemen, which they regard as waste; to do away with the wage system and secure general cooperation; and to prevent competition, which they deem the fundamental cause of the impoverishment of labor. The more moderate of them, without going so far, go in the same direction, and seek some remedy or palliation of the worst forms of poverty by Government regulation.

The essential character of Socialism is that it looks to the extension of the functions of the State for the remedy of social evils; that it would substitute regulation and direction for competition, and control by organised society for the free play of individual desire and effort.

The vice of Socialism in all its degrees is its want of radicalism, of going to the root.

Its advocates generally teach the preposterous and degrading doctrine that slavery was the first condition of labor. It assumes that the tendency of wages to a minimum is the natural law, and seeks to abolish wages; it assumes that the natural result of competition is to grind down workers, and seeks to abolish competition by restrictions, prohibitions, and extensions of governing power. Thus, mistaking effects for causes, and childishly blaming the state for hitting it, it wastes strength in striving for remedies that when not worse are futile. ...

As for through-going Socialism – which is the more to be honoured as having the courage of its convictions – it would carry these vices to full expression jumping to conclusions without effort to discover causes,

  • it fails to see that oppression does not come from the nature of capital, but from the wrong that robs labor by divorcing it from land, and that creates a fictitious capital that is really capitalised monopoly.
  • It fails to see that it would be impossible for capital to oppress labor were labor free to the natural material of production; that the wage system itself springs from mutual convenience, being a form of cooperation in which one of the parties prefers a certain to a contingent result, and that what it calls the “iron law of wages” is not the natural law of wages; but only the law of wages in that unnatural condition in which men are made helpless by being deprived of the materials for life and work.
  • It fails to see that what it mistakes for the evils of competition are really the evils of restricted competition are due to a one-sided competition to which men are forced when deprived of land; whilst its methods, the organisation of men into industrial armies, the direction and control of all production and exchange by governmental or semi-governmental bureaus, would, if carried to full expression, mean Egyptian despotism....
From both Anarchists and Socialists we fundamentally differ. We regard them as erring in opposite directions – the one in ignoring the social nature of man, the other in ignoring his individual nature. While we see that man is primarily an individual, and that nothing but evil has come or can come from the interference by the State with things that belong to individual action, we also see that he is a social being, and that the State is requisite to social advance, having an indispensable place in the natural order.

Looking on the bodily organism as the analogue of the social organism, the Anarchists seem to us like men who would try to get along without heads, and the Socialists like men who would try to rule the wonderfully complex and delicate internal relations of their frames by conscious will.

We differ from the Socialists in our diagnosis of the evil, and we differ from them as to remedies. ...

The fundamental difference is in this: Socialism in all its phases looks on the evils of our civilisation as springing from the inadequacy or inharmony of natural relations, which must be artificially organised or improved. In its idea there develops on the State the necessity of organising the industrial relations of men, the construction, as it were, of a great machine whose complicated parts shall properly work together under the direction of human intelligence.

This is the reason why Socialism tends towards Atheism. Failing to see the order and symmetry of natural law, it fails to recognise God! ...   read the whole article

Dan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?
Socialist Confusions
The classical liberal distinctions between land, labor and capital were greatly confused by socialists, and particularly Marxists, who substituted the fuzzy abstract term, "means of production," for all three factors. They also blurred the distinction between common property and state property, for socialists believed, as royalty also believed, that they were the people.

Today, the confusions between land and capital and between state property and common property are shared by socialists and royal libertarians, and only classical liberals keep these distinctions clearly defined. Yet royal libertarians frequently duck the land issue by charging that it is the classical liberals, not the royal libertarians, who have embraced socialist ideas. ...

The red, red herring
Royal libertarians are fond of confusing the classical liberal concept of common land ownership, particularly as espoused by land value tax advocate Henry George, with socialism. Yet socialists have always been contemptuous of George and of the distinction between land monopoly and capital monopolies. However, Frank Chodorov and Albert J. Nock (the original editors of The Freeman) were both advocates of George's economic remedies as well as lovers of individual liberty.
The only reformer abroad in the world in my time who interested me in the least was Henry George, because his project did not contemplate prescription, but, on the contrary, would reduce it to almost zero. He was the only one of the lot who believed in freedom, or (as far as I could see) had any approximation to an intelligent idea of what freedom is, and of the economic prerequisites to attaining it....One is immensely tickled to see how things are coming out nowadays with reference to his doctrine, for George was in fact the best friend the capitalist ever had. He built up the most complete and most impregnable defense of the rights of capital that was ever constructed, and if the capitalists of his day had had sense enough to dig in behind it, their successors would not now be squirming under the merciless exactions which collectivism is laying on them, and which George would have no scruples whatever about describing as sheer highwaymanry. --Albert J. Nock "Thoughts on Utopia"... Read the whole piece

Marjorie Carter: My Introduction to Henry George [my grandmother's fictionalized account of her family's first encounter with these ideas]
"What's a little blizzard?" he asked in a crusading voice. "Did you see this thing that came in the mail the other day? From the Henry George School of Social Science?"

"I saw it, but I didn't read it." I tried to sound brisk, intelligent, and rather busy-doing-something-else-ish but he went on explaining.

Of course, as things turned out, it would be highly unwise, I am sure, for me to admit that at the time he thought the whole scheme might be the least bit subversive, and that it was Duty and not Pleasure that was driving him out into the night, and so I shall skip to the next time we mentioned Henry George, because I was asleep when he came home. ...

Well, the class is going on – nicely, too, I am sure. But the impression the Henry George School of Social Science has made on me as individual and on us as a family, is no mere fleeting one. It has changed our home life, our table talk, our avocations (for who could go lightheartedly of an evening in spring to drive a coupla pails of golf balls, when there was still Blackstone to be read in connection with next week's assignment?) and it has practically obliterated our social life, our friends now dividing like all Gaul, into (a) those who disagree with George and have no further truck with us when asked to analyze their reasons for disagreeing, and (b) those who think, like Bruce, that he ‘has something there' and who discuss it delightedly far into the night, and (c) those who never attended the meetings, stalwart souls, and who wonder vaguely what has come over us, but run too fast to be told. ... Read the whole piece

Bill Batt: The Compatibility of Georgist Economics and Ecological Economics

During the late 19th century, the burden of various direct taxes was not so large that many common people felt their acute impact. It was, however, a time of extreme disparities between the poor and the wealthy, and the single tax was a means by which to redress some of those disparities. It would also foster the availability of employment by making labor more attractive relative to land and capital investment. In a word, people would more likely have to earn their money. The fruits of land wealth, distributed among people equally in the form of government services, would go far toward both enhancing economic opportunity and correcting inequality.

Georgists today adhere to much the same points of view, although there are some significant differences. George himself was an ardent free trader, mainly because he believed that the single tax should supplant tariffs. After Ricardo, he accepted the idea of comparative advantage that arose from trade, but only after land (resource) rents were collected so as to preclude the raping of the natural environments of countries rich in such resources. He also believed that population growth was good — the more the better, and took special pains to refute Malthus. But one should also recall that he was living at a time when the expanse of the American continent was still open to any homesteader who chose to do so. Population growth was not a problem at that time. These elements of George’s thought are inconsequential to his followers today. Yet it is important to note that Georgists are not socialists; they do not subscribe to the view that society should own the means of production. These should remain privately owned by and large (except perhaps as today’s economic theory would call for, i.e., natural monopolies, public goods, and other government instruments). They are, rather, free-marketers in the full sense of the world, even more ardently than many contemporary American conservatives. He believed that removing the accretion of economic rent from landsites would restore self-regulating equilibrium of the marketplace, thus obviating the need for the heavy hand of government controls. ....

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

Henry George: The Condition of Labor, part III

 

Albert Jay Nock — Henry George: Unorthodox American

George held with Paine and Thomas Jefferson that government is at best a necessary evil, and the less of it the better. Hence the right thing was to decentralize it as far as possible, and reduce the functions and powers of the state to an absolute minimum, which, he said, the confiscation of rent would do automatically; whereas the collectivist proposal to confiscate and manage natural resources as a state enterprise would have precisely the opposite effect — it would tend to make the state everything and the individual nothing. ...read the whole article

Murray Rothbard: The Single Tax: Economic and Moral Implications

Seventy-five years ago, Henry George spelled out his "single tax" program Progress and Poverty, one of the best-selling economic works of all time. According to E. R. Pease, socialist historian and long-time secretary of the Fabian Society, this volume "beyond all question had more to do with the socialist revival of that period in England than any other book." ...


 Bill Batt: Fallacies of the Slippery Slope Argument

It becomes particularly remarkable, therefore, to reflect upon our reluctance as a society to confront certain policy matters because in the minds of some they would “open the doors” to other ethical choices down the line. We do indeed have choices, both as individuals and as corporate institutions. Yet rather than openly confront each dilemma incrementally as mature and responsible adults, many would close such matters from discussion entirely because it would “lead us down the garden path” to some forbidden or dangerous realm or other.

Creeping Socialism
Consider some instances where the specter of the slippery slope has often been invoked. We all are old enough to remember “creeping socialism,” the conservative bugaboo which we thought died after Goldwater invoked it to damn Johnson’s Great Society programs.  ... read the whole article

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