|Wealth and Want
|... because democracy alone is not enough to produce widely shared prosperity.
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
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,
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
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
would have the most delicate system of co-operation that can possibly
be devised by the wit of man.
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
Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)
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
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.
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
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)
Mason Gaffney: Privatizing Land Without Giveaway
Some of our unresolved problems today include
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.
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
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
based on love. As the First Epistle of John says, "There is no fear
in love; but perfect love casteth out
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
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
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.
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.
"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.
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
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
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,
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 articleDan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?
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 pieceMarjorie 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
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.
Henry George: The Condition of Labor, part III
Albert Jay Nock — Henry George: Unorthodox American
Murray Rothbard: The Single Tax: Economic and Moral Implications
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.
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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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper