Capitalism is a very fine system, and the
U.S. really ought to try it sometime! That is one of the themes of this
What we have now is Capitalism on a Tilted Playing
wonder so many of us are struggling to earn enough to support our selves
and our families.
It isn't that capitalism isn't the best system
(I'm persuaded that it is), but rather that we aren't yet operating
under a truly capitalist system. "Land monopoly capitalism" seems
to me to be the best shorthand description
of what we have now — and it isn't producing widely shared
prosperity or genuine equality of opportunity, both of which are
on which a system should be judged. Ours is lacking, and I believe
that Henry George
points to the remedy which will correct the tilt.
As long as we permit individuals, families, trusts and corporations
to privatize economic value that rightly belongs to all of us, and then
to fund government
spending via taxes on wages and products, we are permitting a system
designed to concentrate income and wealth in a small segment of our population.
This is theft of the worst sort — legalized theft. A fresh robbery
The first man who, having
piece of ground, bethought himself
of saying, “This is mine”, and found people simple enough to believe
him, was the real founder of civil society.
From how many crimes, wars and
from how many horrors and
misfortunes, might not anyone have
saved mankind by pulling up the
stakes, filling in the ditch, and crying to his fellows, “BEWARE OF
LISTENING TO THIS IMPOSTOR; YOU ARE UNDONE IF YOU ONCE FORGET THAT THE
FRUITS OF THE EARTH BELONG TO US ALL, AND THE EARTH ITSELF TO NOBODY.”
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty, Chapter 5: The
Basic Cause of Poverty (in the unabridged: Book
V: The Problem Solved)
... For land is the habitation of man,
the storehouse upon which he must draw for all his needs, the material
to which his labor must be
for the supply of all his desires; for even the products of the
sea cannot be taken, the light of the sun enjoyed, or any of the forces
utilized, without the use of land or its products. On the land
we are born, from it we live, to it we return again — children
of the soil as truly as is the blade of grass or the flower of the
away from man all that belongs to land, and he is but a disembodied
spirit. Material progress cannot rid us of our dependence upon land;
it can but
add to the power of producing wealth from land; and hence, when
land is monopolized, it might go on to infinity without increasing
improving the condition of those who have but their labor. It can
but add to the value of land and the power which its possession gives.
in all times, among all peoples, the possession of land is the
base of aristocracy, the foundation of great fortunes, the source of
power. ... read the
The elder Mirabeau, we are told, ranked the proposition of Quesnay,
to substitute one single tax on rent (the impôt unique)
for all other taxes, as a discovery equal in utility to the invention
of writing or the substitution of the use of money for barter.
To whosoever will think over the matter, this saying will appear
an evidence of penetration rather than of extravagance. The advantages
which would be gained by substituting for the numerous taxes by which
the public revenues are now raised, a single tax levied upon the
value of land, will appear more and more important the more they
are considered. ...
Consider the effect upon the production of wealth.
To abolish the taxation which, acting and reacting, now hampers
every wheel of exchange and presses upon every form of industry,
would be like removing an immense weight from a powerful spring.
Imbued with fresh energy, production would start into new life, and
trade would receive a stimulus which would be felt to the remotest
arteries. The present method of taxation operates upon exchange like
artificial deserts and mountains;
it costs more to get goods through a custom house than it does
to carry them around the world.
It operates upon energy, and industry, and skill, and thrift,
like a fine upon those qualities.
If I have worked harder and built myself a good house while
you have been contented to live in a hovel, the taxgatherer now
comes annually to make me pay a penalty for my energy and industry,
by taxing me more than you.
If I have saved while you wasted, I am mulct, while you are
If a man build a ship we make him pay for his temerity, as though
he had done an injury to the state;
if a railroad be opened, down comes the tax collector upon it,
as though it were a public nuisance;
if a manufactory be erected we levy upon it an annual sum which
would go far toward making a handsome profit.
We say we want capital, but if any one accumulate it, or bring
it among us, we charge him for it as though we were giving him
We punish with a tax the man who covers barren fields with ripening
we fine him who puts up machinery, and him who drains a swamp.
How heavily these taxes burden production only those realize who
have attempted to follow our system of taxation through its ramifications,
for, as I have before said, the heaviest part of taxation is that
which falls in increased prices.
To abolish these taxes would be to lift
the whole enormous weight of taxation from productive industry. The
needle of the seamstress
and the great manufactory; the cart horse and the locomotive;
the fishing boat and the steamship; the farmer's plow and the merchant's
stock, would be alike untaxed. All would be free to make or
to buy or to sell, unfined by taxes, unannoyed by the taxgatherer.
Instead of saying to the producer, as it does now, "The more
you add to the general wealth the more shall you be taxed!" the
state would say to the producer, "Be as industrious, as
thrifty, as enterprising as you choose, you shall have your
full reward! You
shall not be fined for making two blades of grass grow where
one grew before; you shall not be taxed for adding to the aggregate
And will not the community gain by thus refusing to kill the goose
that lays the golden eggs; by thus refraining from muzzling the ox
that treadeth out the corn; by thus leaving to industry, and thrift,
and skill, their natural reward, full and unimpaired? For there is
to the community also a natural reward. The law of society is, each
for all, as well as all for each. No one can keep to himself the
good he may do, any more than he can keep the bad. Every productive
enterprise, besides its return to those who undertake it, yields
collateral advantages to others. If a man plant a fruit tree, his
gain is that he gathers the fruit in its time and season. But in
addition to his gain, there is a gain to the whole community. Others
than the owner are benefited by the increased supply of fruit; the
birds which it shelters fly far and wide; the rain which it helps
to attract falls not alone on his field; and, even to the eye which
rests upon it from a distance, it brings a sense of beauty. And so
with everything else. The building of a house, a factory, a ship,
or a railroad, benefits others besides those who get the direct profits.
Well may the community leave to the individual producer all that
prompts him to exertion; well may it let the laborer have the full
reward of his labor, and the capitalist the full return of his capital.
For the more that labor and capital produce, the greater grows the
common wealth in which all may share. And in the value or rent of
land is this general gain expressed in a definite and concrete form.
Here is a fund which the state may take while leaving to labor and
capital their full reward. With increased activity of production
this would commensurately increase.
And to shift the burden of taxation from production and exchange
to the value or rent of land would not merely be to give new stimulus
to the production of wealth; it would be to open new opportunities.
For under this system no one would care to hold land unless to use
it, and land now withheld from use would everywhere be thrown open
to improvement. ...
And it must be remembered that this would apply, not merely to agricultural
land, but to all land. Mineral land would be thrown open to use,
just as agricultural land; and in the heart of a city no one could
afford to keep land from its most profitable use, or on the outskirts
to demand more for it than the use to which it could at the time
be put would warrant. Everywhere that land had attained a value,
taxation, instead of operating, as now, as a fine upon improvement,
would operate to force improvement. Whoever planted an orchard, or
sowed a field, or built a house, or erected a manufactory, no matter
how costly, would have no more to pay in taxes than if he kept so
much land idle.
The monopolist of agricultural land would be taxed as much as
though his land were covered with houses and barns, with crops
and with stock.
The owner of a vacant city lot would have to pay as much for
the privilege of keeping other people off of it until he wanted
to use it, as his neighbor who has a fine house upon his lot.
It would cost as much to keep a row of tumble-down shanties
upon valuable land as though it were covered with a grand hotel
or a pile of great warehouses filled with costly goods.
Thus, the bonus that wherever labor is most productive must now
be paid before labor can be exerted would disappear.
The farmer would not have to pay out half his means, or mortgage
his labor for years, in order to obtain land to cultivate;
the builder of a city homestead would not have to lay out as
much for a small lot as for the house he puts upon it*;
the company that proposed to erect a manufactory would not have
to expend a great part of its capital for a site.
And what would be paid from year to year to the state would
be in lieu of all the taxes now levied upon improvements, machinery,
... read the whole chapter
But great as they thus appear, the advantages of a transference
of all public burdens to a tax upon the value of land cannot be fully
appreciated until we consider the effect upon the distribution of
Tracing out the cause of the unequal distribution of wealth which
appears in all civilized countries, with a constant tendency to greater
and greater inequality as material progress goes on, we have found
it in the fact that, as civilization advances, the ownership of land,
now in private hands, gives a greater and greater power of appropriating
the wealth produced by labor and capital.
Thus, to relieve labor and capital from all taxation, direct and
indirect, and to throw the burden upon rent, would be, as far as
it went, to counteract this tendency to inequality, and, if it went
so far as to take in taxation the whole of rent, the cause of inequality
would be totally destroyed. Rent, instead of causing inequality,
as now, would then promote equality. Labor and capital would then
receive the whole produce, minus that portion taken by the state
in the taxation of land values, which, being applied to public purposes,
would be equally distributed in public benefits.
That is to say, the wealth produced in every community would be
divided into two portions.
One part would be distributed in wages and interest between
individual producers, according to the part each had taken in the
work of production;
the other part would go to the community as a whole, to be distributed
in public benefits to all its members.
In this all would share equally — the weak with the strong,
young children and decrepit old men, the maimed, the halt, and the
blind, as well as the vigorous. And justly so — for while
one part represents the result of individual effort in production,
other represents the increased power with which the community
as a whole aids the individual.
Thus, as material progress tends to increase rent, were rent taken
by the community for common purposes the very cause which now tends
to produce inequality as material progress goes on would then tend
to produce greater and greater equality.
Who can say to what infinite powers the wealth-producing capacity
of labor may not be raised by social adjustments which will give
to the producers of wealth their fair proportion of its advantages
and enjoyments! With present processes the gain would be simply incalculable,
but just as wages are high, so do the invention and utilization of
improved processes and machinery go on with greater rapidity and
But I shall not deny, and do not wish
to lose sight of the fact, that while thus preventing waste and thus
adding to the efficiency
of labor, the equalization in the distribution of wealth
that would result from the simple plan of taxation that I propose,
the intensity with which wealth is pursued. It seems to me
that in a condition of society in which no one need fear poverty,
would desire great wealth — at least, no one would
take the trouble to strive and to strain for it as men do
the spectacle of men who have only a few years to live, slaving
away their time for the sake of dying rich, is in itself
and absurd, that in a state of society where the abolition
of the fear of want had dissipated the envious admiration
with which the
masses of men now regard the possession of great riches,
whoever would toil to acquire more than he cared to use would
upon as we would now look on a man who would thatch his head
a dozen hats.
And though this incentive to production be withdrawn, can we not
spare it? Whatever may have been its office in an earlier stage of
development, it is not needed now. The dangers that menace our civilization
do not come from the weakness of the springs of production. What
it suffers from, and what, if a remedy be not applied, it must die
from, is unequal distribution!
Nor would the removal of this incentive, regarded only from the
standpoint of production, be an unmixed loss. For, that the aggregate
of production is greatly reduced by the greed with which riches are
pursued, is one of the most obtrusive facts of modern society. While,
were this insane desire to get rich at any cost lessened, mental
activities now devoted to scraping together riches would be translated
into far higher spheres of usefulness. ... read the whole
The truth to which we were led in the politico-economic branch of
our inquiry is as clearly apparent in the rise and fall of nations
and the growth and decay of civilizations, and it accords with those
deep-seated recognitions of relation and sequence that we denominate
moral perceptions. Thus are given to our conclusions the greatest
certitude and highest sanction.
This truth involves both a menace and a promise. It shows that the
evils arising from the unjust and unequal distribution of wealth,
which are becoming more and more apparent as modern civilization
goes on, are not incidents of progress, but tendencies which must
bring progress to a halt; that they will not cure themselves, but,
on the contrary, must, unless their cause is removed, grow greater
and greater, until they sweep us back into barbarism by the road
every previous civilization has trod. But it also shows that these
evils are not imposed by natural laws; that they spring solely from
social maladjustments which ignore natural laws, and that in removing
their cause we shall be giving an enormous impetus to progress.
The poverty which in the midst of abundance
pinches and embrutes men, and all the manifold evils which flow from
it, spring from a
denial of justice. In permitting the monopolization of the
opportunities which nature freely offers to all, we have ignored
law of justice — for, so far as we can see, when we view
things upon a large scale, justice seems to be the supreme
law of the universe.
But by sweeping away this injustice and asserting the rights
of all men to natural opportunities, we shall conform ourselves
to the law —
we shall remove the great cause of unnatural inequality in the
distribution of wealth and power;
we shall abolish poverty;
tame the ruthless passions of greed;
dry up the springs of vice and misery;
light in dark places the lamp of knowledge;
give new vigor to invention and a fresh impulse to discovery;
substitute political strength for political weakness; and
make tyranny and anarchy impossible.
The reform I have proposed accords with
all that is politically, socially, or morally desirable. It has the
qualities of a true reform,
for it will make all other reforms easier. What is it but the
carrying out in letter and spirit of the truth enunciated in the
Declaration of Independence — the "self-evident" truth that is
the heart and soul of the Declaration —"That all
men are created equal; that they are endowed by their Creator
inalienable rights; that among these are life, liberty, and
the pursuit of happiness!"
These rights are denied when the equal
right to land — on
which and by which men alone can live — is denied. Equality
of political rights will not compensate for the denial of the
equal right to the bounty of nature. Political liberty, when
right to land is denied, becomes, as population increases and
invention goes on, merely the liberty to compete for employment
Our primary social adjustment is a denial of justice. In allowing
one man to own the land on which and from which other men must live,
we have made them his bondsmen in a degree which increases as material
progress goes on. This is the subtle alchemy that in ways they do
not realize is extracting from the masses in every civilized country
the fruits of their weary toil; that is instituting a harder and
more hopeless slavery in place of that which has been destroyed;
that is bringing political despotism out of political freedom, and
must soon transmute democratic institutions into anarchy.
It is this that turns the blessings of material progress into a
curse. It is this that crowds human beings into noisome cellars and
squalid tenement houses; that fills prisons and brothels; that goads
men with want and consumes them with greed; that robs women of the
grace and beauty of perfect womanhood; that takes from little children
the joy and innocence of life's morning.
Civilization so based cannot continue.
The eternal laws of the universe forbid it. Ruins of dead empires
testify, and the witness that is
in every soul answers, that it cannot be. It is something grander
than Benevolence, something more august than Charity — it is
Justice herself that demands of us to right this wrong. Justice that
will not be denied; that cannot be put off — Justice
that with the scales carries the sword. Shall we ward the stroke
and prayers? Shall we avert the decrees of immutable law by
raising churches when hungry infants moan and weary mothers
Though it may take the language of prayer,
it is blasphemy that attributes to the inscrutable decrees of Providence
and brutishness that come of poverty; that turns with folded
hands to the All-Father and lays on Him the responsibility for the
and crime of our great cities. We degrade the Everlasting.
We slander the Just One. A merciful man would have better ordered
a just man would crush with his foot such an ulcerous ant-hill!
It is not the Almighty, but we who are responsible for the vice and
misery that fester amid our civilization. The Creator showers
us his gifts — more than enough for all. But like swine scrambling
for food, we tread them in the mire — tread them in the
mire, while we tear and rend each other!... read
the whole chapter
Henry George: Thou Shalt Not Steal (1887
"Thou shalt not steal." That
means, of course, that we
ourselves must not steal. But does it not also mean that we must not
suffer anybody else to steal if we can help it?
"Thou shalt not steal." Does it
not also mean: "Thou shalt not
suffer thyself or anybody else to be stolen from?" If it does, then
we, all of us, rich and poor alike, are responsible for this social
crime that produces poverty. Not merely the people who monopolize the
land — they are not to blame above anyone else, but we who
permit them to monopolize land are also parties to the theft. ... read
the whole article
Henry George: The
little Island or a little World
IMAGINE an island girt with ocean; imagine a little world
in space. Put on it, in imagination, human beings. Let them divide
the land, share and share alike, as individual property. At first,
while population is sparse and industrial processes rude and
primitive, this will work well enough.
Turn away the eyes of the mind for
a moment, let time pass, and
look again. Some families will have died out, some have greatly
multiplied; on the whole, population will have largely increased, and
even supposing there have been no important inventions or
improvements in the productive arts, the increase in population, by
causing the division of labor, will have made industry more complex.
During this time some of these people will have been careless,
generous, improvident; some will have been thrifty and grasping. Some
of them will have devoted much of their powers to thinking of how
they themselves and the things they see around them came to be, to
inquiries and speculations as to what there is in the universe beyond
their little island or their little world, to making poems, painting
pictures, or writing books; to noting the differences in rocks and
trees and shrubs and grasses; to classifying beasts and birds and
fishes and insects – to the doing, in short, of all the many
things which add so largely to the sum of human knowledge and human
happiness, without much or any gain of wealth to the doer. Others
again will have devoted all their energies to the extending of their
possessions. What, then, shall we see, land having been all this time
treated as private property? Clearly, we shall see that the primitive
equality has given way to inequality. Some will have very much more
than one of the original shares into which the land was divided; very
many will have no land at all. Suppose that, in all things save this,
our little island or our little world is Utopia – that there are
no wars or robberies; that the government is absolutely pure and
taxes nominal; suppose, if you want to, any sort of a currency;
imagine, if you can imagine such a world or island, that interest is
utterly abolished; yet inequality in the ownership of land will have
produced poverty and virtual slavery.
For the people we have supposed
are human beings – that is to
say, in their physical natures at least, they are animals who can
live only on land and by the aid of the products of land. They may
make machines which will enable them to float on the sea, or perhaps
to fly in the air, but to build and equip these machines they must
have land and the products of land, and must constantly come back to
land. Therefore those who own the land must be the masters of the
rest. Thus, if one man has come to own all the land, he is their
absolute master even to life or death. If they can live on the land
only on his terms, then they can live only on his terms, for without
land they cannot live. They are his absolute slaves, and so long as
his ownership is acknowledged, if they want to live, they must do in
everything as he wills.
If, however, the concentration of
landownership has not gone so
far as to make one or a very few men the owners of all the
land – if there are still so many landowners that there is
competition between them as well as between those who have only their
labor – then the terms on which these non-landholders can live
will seem more like free contract. But it will not be free contract.
Land can yield no wealth without the application of labor; labor can
produce no wealth without land. These are the two equally necessary
factors of production. Yet, to say that they are equally necessary
factors of production is not to say that, in the making of contracts
as to how the results of production are divided, the possessors of
these two meet on equal terms. For the nature of these two factors is
very different. Land is a natural element; the human being must have
his stomach filled every few hours. Land can exist without labor, but
labor cannot exist without land. If I own a piece of land, I can let
it lie idle for a year or for years, and it will eat nothing. But the
laborer must eat every day, and his family must eat. And so, in the
making of terms between them, the landowner has an immense advantage
over the laborer. It is on the side of the laborer that the intense
pressure of competition comes, for in his case it is competition
urged by hunger. And, further than this: As population increases, as
the competition for the use of land becomes more and more intense, so
are the owners of land enabled to get for the use of their land a
larger and larger part of the wealth which labor exerted upon it
produces. That is to say, the value of land steadily rises. Now, this
steady rise in the value of land brings about a confident expectation
of future increase of value, which produces among landowners all the
effects of a combination to hold for higher prices. Thus there is a
constant tendency to force mere laborers to take less and less or to
give more and more (put it which way you please, it amounts to the
same thing) of the products of their work for the opportunity to
work. And thus, in the very nature of things, we should see on our
little island or our little world that, after a time had passed, some
of the people would be able to take and enjoy a superabundance of all
the fruits of labor without doing any labor at all, while others
would be forced to work the livelong day for a pitiful living.
But let us introduce another
element into the supposition. Let us
suppose great discoveries and inventions – such as the
steam-engine, the power-loom, the Bessemer process, the
reaping-machine, and the thousand and one labor-saving devices that
are such a marked feature of our era. What would be the result?
Manifestly, the effect of all such
discoveries and inventions is
to increase the power of labor in producing wealth – to enable the
same amount of wealth to be produced by less labor, or a greater
amount with the same labor. But none of them lessen, or can lessen
the necessity for land. Until we can discover some way of making
something out of nothing – and that is so far beyond our powers as
to be absolutely unthinkable – there is no possible discovery or
invention which can lessen the dependence of labor upon land. And,
this being the case, the effect of these labor-saving devices, land
being the private property of some, would simply be to increase the
proportion of the wealth produced that landowners could demand for
the use of their land. The ultimate effect of these discoveries and
inventions would be not to benefit the laborer, but to make him more
And, since we are imagining
conditions, imagine laborsaving
inventions to go to the farthest imaginable point, that is to say, to
perfection. What then? Why then, the necessity for labor being done
away with, all the wealth that the land could produce would go entire
to the landowners. None of it whatever could be claimed by any one
else. For the laborers there would be no use at all. If they
continued to exist, it would be merely as paupers on the bounty of
the landowners! ... read the whole article
Henry George: The Wages of
Nor can the State cure poverty
by regulating wages. It is as
much beyond the power of the State to regulate wages as it is to
regulate the rates of interest. Usury laws have been tried again and
again, but the only effect they have ever had has been to increase what
the poorer borrowers must pay, and for the same reasons that all
attempts to lower by regulation the price of goods have always resulted
merely in increasing their price.
rate of wages is fixed by the ease or difficulty
with which labor can obtain access to land, ranging from the full
earnings of labor, where land is free; to the least on which laborers
can live and reproduce, where land is fully monopolised.... read
the whole article
Henry George: Concentrations
of Wealth Harm America
(excerpt from Social Problems)
The Evils of
Consider the important part in
building up fortunes which the
increase of land values has had, and is having, in the United States.
This is, of course, monopoly, pure and simple. When land
value it does not mean that its owner has added to the general
wealth. The owner may never have seen the land or done aught to
improve it. He may, and often does, live in a distant city or in
another country. Increase of
land values simply means that the
owners, by virtue of their appropriation of something that existed
before man was, have the power of taking a larger share of the wealth
produced by other people's labor. Consider
- how much the monopolies
created and the advantages given to the unscrupulous by the tariff
and by our system of internal taxation --
- how much the railroad (a
business in its nature a monopoly), telegraph, gas, water and other
similar monopolies, have done to concentrate wealth;
- how special
rates, pools, combinations, corners, stock-watering and
stock-gambling, the destructive use of wealth in driving off or
buying off opposition which the public must finally pay for, and many
other things which these will suggest, have operated to build up
large fortunes, and it will at least appear that the unequal
distribution of wealth is due in great measure to sheer spoliation;
- that the reason why those
who work hard get so little, while so many
who work little get so much, is, in very large measure, that the
earnings of the one class are, in one way or another, filched away
from them to swell the incomes of the other.
That individuals are constantly
making their way from the
ranks of those who get less than their earnings to the ranks of those
who get more than their earnings, no more proves this state of things
right than the fact that merchant sailors were constantly becoming
pirates and participating in the profits of piracy, would prove that
piracy was right and that no effort should be made to suppress
it. ... Read the entire article
Arthur J. Ogilvy: A Colonist's Plea for Land Nationalization (about 1890)
The increase of value in my land has arisen from the execution of public works and increase of population, causing an increased demand for the land; in other words, it has arisen from the national progress; and I, so far from aiding in this progress have actually hindered it, by keeping my property locked up and so forcing on intending producers to inferior or less accessible lands; and by holding so much land back have helped to make land so much scarcer, and, therefore, so much dearer, and so have helped to increase the tribute which industry has to pay to monopoly for the mere privilege of exerting itself.
Whether the value of land and the value of the improvements can be separated or not, they are quite distinct elements, just as in a glass of grog, the brandy is brandy and the water water, each with its own distinctive properties and effects, notwithstanding their indistinguishable com-mixture; and he therefore who lets land levies blackmail upon industry by charging for something which represents no service at all, none the less that at the same time he charges for something else that does represent service.
No doubt there are many other things besides land in which a monopoly of the article will enable the possessor to levy something resembling blackmail; but there are points of difference that distinguish them all from the pure and simple appropriation of land monopoly. ...
No doubt there are many other things besides land in which a monopoly of the article will enable the possessor to levy something resembling blackmail; but there are points of difference that distinguish them all from the pure and simple appropriation of land monopoly.
The first is that none of them excludes other people from making a living or from making earnings to any extent by other means than the article monopolised.
If by a day's labour or by pure accident I find a diamond, I may ask a price entirely disproportionate to the value of my labour; but then the public need not buy my diamond unless they like. My finding a diamond does not prevent other people from looking for diamonds with as much chance of finding them as I had, and, if they don't think they are likely to find any by looking for them they can go without, and be none the worse.
But every piece of land appropriated shuts out so many other people from that land, and as all the land (practically speaking) is appropriated, or in one way or another out of reach of the masses, they are at the mercy of the landholders, and have no choice but either to rent it from them as tenants or work for them as labourers on the hardest terms to which competition can drive them; which means that the landowner has the power of appropriating the greater part of their earnings in return for the mere permission to them to earn anything.
Or suppose that, instead of finding a diamond, I buy tin, and that next week the price goes up to double here there is an additional distinction between my gains and the land speculator's; for not only are the public under no compulsion to buy tin (while they are to rent land), and not only does tin represent the results of labour, and so represent earnings (which land does not), but the magnitude of my gain in most cases represents compensation for great risk.
The earnings of farmers and of miners may average the same, but the farmers' average is made up of pretty equal profits all round, while the miners' average is made up of a few big prizes and many blanks. And what applies to the miner applies also to the speculator in mining products. His occasional large profits represent compensation for great risks, and is thus as much of the nature of insurance as of profit.
No one would think of either mining or speculating in mining products, unless the many blanks were compensated by occasional large prizes. They are the necessary inducements to engage in those callings, and therefore fair earnings when they come. Land, however, is not a speculation in this sense (though even if it were, its profits would still be appropriation and not earnings for reasons already given); it is a sure investment in the sense that it is subject to no extraordinary risks: to no more risks, that is, than such as are inseparable from all human enterprise, even the safest. ...
Under the system prevailing all over the civilised world every country is appropriated by a (comparatively) few owners.
What these owners do with the land is a matter the State concerns itself very little about. Whether they occupy and use it themselves, or let it to a tenant and live in idleness on the fruits of his labour; whether they cultivate it like a garden, making it yield abundant wealth and maintain hundreds of families, or leave it in a state of nature to carry sheep, excluding the whole rising tide of population from the opportunity of developing its boundless resources because the sheep pay them rather better; whether they open out the mineral treasures hidden in its depths or lock them up by demanding such exorbitant royalties that enterprise either will not attempt the work, or attempts and fails; whether they construct factories and build cities upon it, or turn out the whole population and burn down their dwellings (as in the Scottish Highlands) because a foreign millionaire offers them a higher price for the privilege of turning it into a wilderness to shoot deer in than the children of the soil can give for the mere privilege of earning a living; all these things the State regards as matters of quite secondary consideration with which it is not called upon to interpose, because that would be interfering with the "sacred rights" of property. ...
As the landlord by virtue of his monopoly of the land holds the applicant for it at his mercy, so the applicant once in possession holds the labourer at his mercy.
The competition was first for possession of the land, it is now for employment on the land. The competition is in the one case open and direct, in the other disguised and indirect.
Labourers do not usually underbid each other for employment as tenants overbid each other for possession, but it comes to much the same thing as if they did: The more numerous the labourers in proportion to the work to be done the lower the wages, and vice versa.
If the landlords were to divide their land into as many pieces of equal value as there were applicants for it, and were to offer these pieces separately, there would be no competition to run rents up, and the landlord would have to take what he could get for it a merely nominal rent.
To make money by his monopoly he must keep up its character as a monopoly; that is, he must offer his land in a single block so to speak, and so compel competition.
And just as the landlord forces rents up by offering his whole land for one tenant's occupation, and so setting all to compete for the privilege of being that one, so the occupier in his turn forces wages down by employing as few labourers as he can, and so setting all to compete for the privilege of being among those few.
The secret of his power over the labourer is the same as that of his landlord over him. It is not in his capital as is generally supposed, but in his getting possession of more laud than he can use by his own personal labour, and preventing other people from using it by their personal labour, except for his profit.
The landlord makes the occupier give him his money; the occupier makes the labourer give him his work.
In so far as the occupier can keep his wage expenditure below the general level by doing the same work with fewer men, or paying them less wages, he can retain the savings to himself; but in so far as he only succeeds in keeping down the general cost of labour, he is only keeping down the recognised cost of working the land, and so increasing the value of land, and so raising rent; and the result of his efforts (as a rule), is only to keep down the general level, for all are playing the same game, and any saving effected by one is soon copied by all, and absorbed in a general reduced cost of production, increasing the value of land and raising rent. ...
Here is a farm, selected from the assessment roll of this district as a fair sample of a so-called agricultural farm consisting of 640 acres and rented at £150. It keeps, I believe, at the outside, two men at work the year round; any other applicants for employment being dismissed with the formula, "No work for you."
Two men to a whole square mile! And this on a farm within 15 miles of the port of Hobart, and containing hardly an acre unfit for cultivation.
All the produce that comes off this farm has to be raised by the labour of these two men. and must realise over and above their wages and keep and all collateral working expenses, a surplus of rent, £150; rates and taxes, £20; employer's profit (say), £100; total £270; being a profit of £135 to each man. No man, in short, is allowed the opportunity to earn a living on this square mile of cultivable land unless he produces, over and above the supply of his own modest wants, a net annual surplus of £135 to hand over to somebody else.
If employment is restricted, it is land monopoly that restricts it.
It is not that there is not abundance of land to use, abundance of use to put it to, and abundance of profit to be made from it, but that the tendency of monopoly is to keep hungry mouths off rather than to take willing hands on. It is naturally concerned only to get as big a share as possible to itself, and is not concerned whether other people have a chance to get a share or not. ...
But it ought to be clear by this time that if all existing landlords were swept away and all the land in use confirmed absolutely upon the occupiers, things would be no better than they are now.
For the evil that weighs upon society, hindering progress, forcing down earnings, and making life to all who have to live by work a struggle for existence is the monopoly of the land; and whether it is A or B who monopolises it, is of no consequence to anybody but A and B.
Wherever one man is allowed to acquire more land than he can use by his own labour for the purpose of preventing other people from using it by their labour except for his profit, that man is master of the situation, and the class of which he is the representative has the world at its feet. And whether the monopolist turns his monopoly to account as an occupying owner by working the labourers for his profit directly, or as a nonoccupier by selling to somebody else (called a tenant) for a yearly payment (called rent) the privilege of working them, is a difference not worth talking about. ... read the whole paper.
Mark Twain Archimedes
"Give me whereon to stand",
said Archimedes, "and I will move the earth." The boast was a pretty
safe one, for he knew quite well that the standing place was wanting,
and always would be wanting. But suppose he had moved the earth, what
then? What benefit would it have been to anybody?
... I know of a mechanical force more powerful than
anything the vaunting engineer of Syracuse ever dreamed of. It is the
force of land monopoly; it is a screw and lever all in one; it will
screw the last penny out of a man's pocket, and bend everything on
earth to its own despotic will. Give me the private ownership
of all the land, and will I move the earth? No; but I will do more. I
will undertake to make slaves of all the human beings on the face of
it. Not chattel slaves exactly, but slaves nevertheless. Read the
" A. J. O." (probably Mark Twain) Slavery
... But I gain in other ways
besides pecuniary benefit. I have lost
the stigma of being a slave driver, and have, acquired instead the
character of a man of energy and enterprise, of justice and
benevolence. I am a "large employer of labour," to whom the whole
country, and the labourer especially, is greatly indebted, and people
say, "See the power of capital! These poor labourers, having no
capital, could not use the land if they had it, so this great and
far-seeing man wisely refuses to let them have it, and keeps it all
for himself, but by providing them with employment his capital saves
them from pauperism, and enables him to build up the wealth of the
country, and his own fortune together."
Whereas it is not my capital
that does any of these things. It is
not my capital but the labourer’s toil that builds up my fortune
and the wealth of the country. It is not my employment that keeps him
from pauperism, but my monopoly of the land forcing him into my
employment that keeps him on the brink of it. It is not want of
capital that keeps the labourer from using the land, but my refusing
him the use of the land that prevents him from acquiring capital. All
the capital he wants to begin with is an axe and a spade, which a
week’s earnings would buy him, and for his maintenance during
the first year, and at any subsequent time, he could work for me or
for others, turnabout, with his work on his own land. Henceforth with
every year his capital would grow of itself, and his independence
with it, and that this is no fancy sketch, anyone can see for himself
by taking a trip into the country, where he will find well-to-do
farmers who began with nothing but a spade and an axe (so to speak)
and worked their way up in the manner described.
Enter the landlord
But now another thought strikes
me. Instead of paying an overseer
to work these men for me, I will make him pay me for the privilege of
doing it. I will let the land as it stands to him or to another
– to whomsoever will give the most for the billet. He shall be
called my tenant instead of my overseer, but the things he shall do
for me are essentially the same, only done by contract instead of for
yearly pay. He, not I, shall find all the capital, take all the risk,
and engage and supervise the men, paying me a lump sum, called rent,
out of the proceeds of their toil, and make what he can for himself
out of the surplus. The competition is as keen in its way for the
land, among people of his class, as it is among the labourers for
employment, only that as they are all possessed of some little means
(else they could not compete) they are in no danger of immediate
want, and can stand out for rather better terms than the labourers,
who are forced by necessity to take what terms they can get. The
minimum in each case amounts practically to a "mere living", but the
mere living they insist on is one of a rather higher standard than
the labourers’; it means a rather more abundant supply and
better quality of those little comforts which are next door to
necessaries. It means, in short, a living of a kind to which people
of that class are accustomed.
For a moderate reduction in my
profits, then – a reduction
equal to the tenant’s narrow margin of profit – I have all
the toil and worry of management taken off my hands, and the risk
too, for be the season good or bad, the rent is bound to be
forthcoming, and I can sell him up to the last rag if he fails of the
full amount, no matter for what reason; and my rent takes precedence
of all other debts. All my capital is set free for investment
elsewhere, and I am freed from the odium of a slave owner,
notwithstanding that the men still toil for my enrichment as when
they were slaves, and that I get more out of them than ever. If I wax
rich while they toil from hand to mouth, and in depressed seasons
find it hard to get work at all; it is not, to all appearances, my
doing, but merely the force of circumstances, the law of nature, the
state of the labour market – fine sounding names that hide the
If wages are forced down it is not
I that do it; it is that greedy
and merciless man the employer (my tenant) who does it. I am a lofty
and superior being, dwelling apart and above such sordid
considerations. I would never dream of grinding these poor labourers,
not I! I have nothing to do with them at all; I only want my rent --
get it. Like the lilies of the field, I toil not, neither do I spin,
and yet (so kind is Providence!) my daily bread (well buttered) comes
to me of itself. Nay, people bid against each other for the privilege
of finding it for me; and no one seems to realise that the
comfortable income that falls to me like the refreshing dew is dew
indeed; but it is the dew of sweat wrung from the labourers’
toil. It is the fruit of their labour which they ought to have; which
they would have if I did not take it from them.
This sketch illustrates the fact
that chattel slavery is not the
only nor even the worst form of bondage. When the use of the earth
– the sole source of our daily bread – is denied unless one
pays a fellow creature for permission to use it, people are bereft of
economic freedom. The only way to regain that freedom is to collect
the rent of land instead of taxes for the public domain.
Once upon a time, labour leaders
in the USA, the UK and Australia
understood these facts. The labour movements of those countries were
filled with people who fought for the principles of ‘the single
tax’ on land at the turn of the twentieth century. But since
then and they have gradually yielded to the forces of privilege and
power daring no longer to come to grips with this fundamental
question, lest they, too, become ridiculed. And so the world
continues to wallow in this particular ignorance – and in its
ensuing poverty and debt. Read the whole piece
Louis Post: Outlines of Louis
F. Post's Lectures, with Illustrative Notes and Charts (1894)
Note 57: While in the Pennsylvania coal regions a few years ago
I was told of an incident that illustrates the power of perpetuating
poverty which resides in the absolute ownership of land.
The miners were in poverty. Despite the lavish protection bestowed
upon them by tariff laws at the solicitation of monopolies which
dictate our tariff policy, the men were afflicted with poverty
in many forms. They were poor as to clothing, poor as to shelter,
poor as to food, and to be more specific, they were in extreme
poverty as to ice. When the summer months came they lacked this
thing because they could not afford to buy, and they suffered.
Owing to the undermining of the ground and the caving in of the
surface here and there, there were great holes into which the snow
and the rain fell in winter and froze, forming a passable quality
of ice. Now it is frequently said that intelligence, industry,
and thrift will abolish poverty. But these virtues were not successful
among the men of whom I speak. They were intelligent enough to
see that this ice if they saved it would abolish their poverty
as to ice, and they were industrious enough and thrifty enough
not only to be willing to save it, but actually to begin the work.
Preparing little caves to preserve the ice in, they went into the
holes after a long day's work in the mines, and gathered what so
far as the need of ice was concerned was to abolish their poverty
in the ensuing summer. But the owner of this part of the earth — a
man who had neither made the earth, nor the rain, nor the snow,
nor the ice, nor even the hole — telegraphed his agent forbidding
the removal of ice except upon payment of a certain sum per ton.
The miners couldn't afford the condition. They controlled the
necessary Labor, and were willing to give it to abolish their poverty;
but the Land was placed beyond their reach by an owner, and in
consequence of that, and not from any lack of intelligence, industry,
or thrift on their own part, their poverty as to ice was perpetuated.
d. Effect of Confiscating Rent to Private Use.
By giving Rent to individuals society ignores this most just law,
99 thereby creating social disorder and inviting social disease.
Upon society alone, therefore, and not upon divine Providence which
has provided bountifully, nor upon the disinherited poor, rests
the responsibility for poverty and fear of poverty.
99. "Whatever dispute arouses the passions
of men, the conflict is sure to rage, not so much as to the
question 'Is it wise?' as to the question 'Is it right?'
"This tendency of popular discussions to
take an ethical form has a cause. It springs from a law of
the human mind; it rests upon a vague and instinctive recognition
of what is probably the deepest truth we can grasp. That alone
is wise which is just; that alone is enduring which is right.
In the narrow scale of individual actions and individual life
this truth may be often obscured, but in the wider field of
national life it everywhere stands out.
"I bow to this arbitrament, and accept
this test." — Progress and Poverty, book vii, ch.
The reader who has been deceived into believing
that Mr. George's proposition is in any respect unjust, will
find profit in a perusal of the entire chapter from which the
foregoing extract is taken.
Let us try to trace the connection by means of a chart, beginning
with the white spaces on page 68. As before, the first-comers take
possession of the best land. But instead of leaving for others
what they do not themselves need for use, as in the previous illustrations,
they appropriate the whole space, using only part, but claiming
ownership of the rest. We may distinguish the used part with red
color, and that which is appropriated without use with blue. Thus:
But what motive is there for appropriating more of the space than
is used? Simply that the appropriators may secure the pecuniary
benefit of future social growth. What will enable them to secure
that? Our system of confiscating Rent from the community that earns
it, and giving it to land-owners who, as such, earn nothing.100
100. It is reported from Iowa that a few years
ago a workman in that State saw a meteorite fall, and. securing
possession of it after much digging, he was offered $105 by
a college for his "find." But the owner of the land
on which the meteorite fell claimed the money, and the two
went to law about it. After an appeal to the highest court
of the State, it was finally decided that neither by right
of discovery, nor by right of labor, could the workman have
the money, because the title to the meteorite was in the man
who owned the land upon which it fell.
Observe the effect now upon Rent and Wages. When other men come,
instead of finding half of the best land still common and free,
as in the corresponding chart on page 68, they find all of it owned,
and are obliged either to go upon poorer land or to buy or rent
from owners of the best. How much will they pay for the best? Not
more than 1, if they want it for use and not to hold for a higher
price in the future, for that represents the full difference between
its productiveness and the productiveness of the next best. But
if the first-comers, reasoning that the next best land will soon
be scarce and theirs will then rise in value, refuse to sell or
to rent at that valuation, the newcomers must resort to land of
the second grade, though the best be as yet only partly used. Consequently
land of the first grade commands Rent before it otherwise would.
As the sellers' price, under these circumstances, is arbitrary
it cannot be stated in the chart; but the buyers' price is limited
by the superiority of the best land over that which can be had
for nothing, and the chart may be made to show it: [chart]
And now, owing to the success of the appropriators of the best
land in securing more than their fellows for the same expenditure
of labor force, a rush is made for unappropriated land. It is not
to use it that it is wanted, but to enable its appropriators to
put Rent into their own pockets as soon as growing demand for land
makes it valuable.101 We may, for illustration, suppose that all
the remainder of the second space and the whole of the third are
thus appropriated, and note the effect: [chart]
At this point Rent does not increase nor Wages fall, because there
is no increased demand for land for use. The holding of inferior
land for higher prices, when demand for use is at a standstill,
is like owning lots in the moon — entertaining, perhaps,
but not profitable. But let more land be needed for use, and matters
promptly assume a different appearance. The new labor must either
go to the space that yields but 1, or buy or rent from owners of
better grades, or hire out. The effect would be the same in any
case. Nobody for the given expenditure of labor force would get
more than 1; the surplus of products would go to landowners as
Rent, either directly in rent payments, or indirectly through lower
Wages. Thus: [chart]
101. The text speaks of Rent only as a periodical
or continuous payment — what would be called "ground
rent." But actual or potential Rent may always be, and
frequently is, capitalized for the purpose of selling the right
to enjoy it, and it is to selling value that we usually refer
when dealing in land.
Land which has the power of yielding Rent to
its owner will have a selling value, whether it be used or
not, and whether Rent is actually derived from it or not. This
selling value will be the capitalization of its present or
prospective power of producing Rent. In fact, much the larger
proportion of laud that has a selling value is wholly or partly
unused, producing no Rent at all, or less than it would if
fully used. This condition is expressed in the chart by the
"The capitalized value of land is the actuarial
'discounted' value of all the net incomes which it is likely
to afford, allowance being made on the one hand for all incidental
expenses, including those of collecting the rents, and on the
other for its mineral wealth, its capabilities of development
for any kind of business, and its advantages, material, social,
and aesthetic, for the purposes of residence." — Marshall's
Prin., book vi, ch. ix, sec. 9.
"The value of land is commonly expressed
as a certain number of times the current money rental, or in
other words, a certain 'number of years' purchase' of that
rental; and other things being equal, it will be the higher
the more important these direct gratifications are, as well
as the greater the chance that they and the money income afforded
by the land will rise." — Id., note.
"Value . . . means not utility, not any
quality inhering in the thing itself, but a quality which gives
to the possession of a thing the power of obtaining other things,
in return for it or for its use. . . Value in this sense — the
usual sense — is purely relative. It exists from and
is measured by the power of obtaining things for things by
exchanging them. . . Utility is necessary to value, for nothing
can be valuable unless it has the quality of gratifying some
physical or mental desire of man, though it be but a fancy
or whim. But utility of itself does not give value. . . If
we ask ourselves the reason of . . . variations in . . . value
. . . we see that things having some form of utility or desirability,
are valuable or not valuable, as they are hard or easy to get.
And if we ask further, we may see that with most of the things
that have value this difficulty or ease of getting them, which
determines value, depends on the amount of labor which must
be expended in producing them ; i.e., bringing them into the
place, form and condition in which they are desired. . . Value
is simply an expression of the labor required for the production
of such a thing. But there are some things as to which this
is not so clear. Land is not produced by labor, yet land, irrespective
of any improvements that labor has made on it, often has value.
. . Yet a little examination will show that such facts are
but exemplifications of the general principle, just as the
rise of a balloon and the fall of a stone both exemplify the
universal law of gravitation. . . The value of everything produced
by labor, from a pound of chalk or a paper of pins to the elaborate
structure and appurtenances of a first-class ocean steamer,
is resolvable on analysis into an equivalent of the labor required
to produce such a thing in form and place; while the value
of things not produced by labor, but nevertheless susceptible
of ownership, is in the same way resolvable into an equivalent
of the labor which the ownership of such a thing enables the
owner to obtain or save." — Perplexed Philosopher,
The figure 1 in parenthesis, as an item of Rent, indicates potential
Rent. Labor would give that much for the privilege of using the
space, but the owners hold out for better terms; therefore neither
Rent nor Wages is actually produced, though but for this both might
In this chart, notwithstanding that but little space is used,
indicated with red, Wages are reduced to the same low point by
the mere appropriation of space, indicated with blue, that they
would reach if all the space above the poorest were fully used.
It thereby appears that under a system which confiscates Rent to
private uses, the demand for land for speculative purposes becomes
so great that Wages fall to a minimum long before they would if
land were appropriated only for use.
In illustrating the effect of confiscating Rent to private use
we have as yet ignored the element of social growth. Let us now
assume as before (page 73), that social growth increases the productive
power of the given expenditure of labor force to 100 when applied
to the best land, 50 when applied to the next best, 10 to the next,
3 to the next, and 1 to the poorest. Labor would not be benefited
now, as it appeared to be when on page 73 we illustrated the appropriation
of land for use only, although much less land is actually used.
The prizes which expectation of future social growth dangles before
men as the rewards of owning land, would raise demand so as to
make it more than ever difficult to get land. All of the fourth
grade would be taken up in expectation of future demand; and "surplus
labor" would be crowded out to the open space that originally
yielded nothing, but which in consequence of increased labor power
now yields as much as the poorest closed space originally yielded,
namely, 1 to the given expenditure of labor force.102 Wages would
then be reduced to the present productiveness of the open space.
102. The paradise to which the youth of our
country have so long been directed in the advice, "Go
West, young man, go West," is truthfully described in "Progress
and Poverty," book iv, ch. iv, as follows :
"The man who sets out from the eastern
seaboard in search of the margin of cultivation, where he
may obtain land without paying rent, must, like the man who
swam the river to get a drink, pass for long distances through
half-titled farms, and traverse vast areas of virgin soil,
before he reaches the point where land can be had free of
rent — i.e., by homestead entry or preemption."
If we assume that 1 for the given expenditure of labor force is
the least that labor can take while exerting the same force, the
downward movement of Wages will be here held in equilibrium. They
cannot fall below 1; but neither can they rise above it, no matter
how much productive power may increase, so long as it pays to hold
land for higher values. Some laborers would continually be pushed
back to land which increased productive power would have brought
up in productiveness from 0 to 1, and by perpetual competition
for work would so regulate the labor market that the given expenditure
of labor force, however much it produced, could nowhere secure
more than 1 in Wages.103 And this tendency would persist until
some labor was forced upon land which, despite increase in productive
power, would not yield the accustomed living without increase of
labor force. Competition for work would then compel all laborers
to increase their expenditure of labor force, and to do it over
and over again as progress went on and lower and lower grades of
land were monopolized, until human endurance could go no further.104
Either that, or they would be obliged to adapt themselves to a
lower scale of living.105
103. Henry Fawcett, in his work on "Political
Economy," book ii, ch. iii, observes with reference to
improvements in agricultural implements which diminish the
expense of cultivation, that they do not increase the profits
of the farmer or the wages of his laborers, but that "the
landlord will receive in addition to the rent already paid
to him, all that is saved in the expense of cultivation." This
is true not alone of improvements in agriculture, but also
of improvements in all other branches of industry.
104. "The cause which limits speculation
in commodities, the tendency of increasing price to draw forth
additional supplies, cannot limit the speculative advance in
land values, as land is a fixed quantity, which human agency
can neither increase nor diminish; but there is nevertheless
a limit to the price of land, in the minimum required by labor
and capital as the condition of engaging in production. If
it were possible to continuously reduce wages until zero were
reached, it would be possible to continuously increase rent
until it swallowed up the whole produce. But as wages cannot
be permanently reduced below the point at which laborers will
consent to work and reproduce, nor interest below the point
at which capital will be devoted to production, there is a
limit which restrains the speculative advance of rent. Hence,
speculation cannot have the same scope to advance rent in countries
where wages and interest are already near the minimum, as in
countries where they are considerably above it. Yet that there
is in all progressive countries a constant tendency in the
speculative advance of rent to overpass the limit where production
would cease, is, I think, shown by recurring seasons of industrial
paralysis." — Progress and Poverty, book iv, ch.
105. As Puck once put it, "the man who
makes two blades of grass to grow where but one grew before,
must not be surprised when ordered to 'keep off the grass.' "
They in fact do both, and the incidental disturbances of general
readjustment are what we call "hard times." 106 These
culminate in forcing unused land into the market, thereby reducing
Rent and reviving industry. Thus increase of labor force, a lowering
of the scale of living, and depression of Rent, co-operate to bring
on what we call "good times." But no sooner do "good
times" return than renewed demands for land set in, Rent rises
again, Wages fall again, and "hard times" duly reappear.
The end of every period of "hard times" finds Rent higher
and Wages lower than at the end of the previous period.107
106. "That a speculative advance in rent
or land values invariably precedes each of these seasons of
industrial depression is everywhere clear. That they bear to
each other the relation of cause and effect, is obvious to
whoever considers the necessary relation between land and labor." — Progress
and Poverty, book v, ch. i.
107. What are called "good times" reach
a point at which an upward land market sets in. From that point
there is a downward tendency of wages (or a rise in the cost
of living, which is the same thing) in all departments of labor
and with all grades of laborers. This tendency continues until
the fictitious values of land give way. So long as the tendency
is felt only by that class which is hired for wages, it is
poverty merely; when the same tendency is felt by the class
of labor that is distinguished as "the business interests
of the country," it is "hard times." And "hard
times" are periodical because land values, by falling,
allow "good times" to set it, and by rising with "good
times" bring "hard times" on again. The effect
of "hard times" may be overcome, without much, if
any, fall in land values, by sufficient increase in productive
power to overtake the fictitious value of land.
The dishonest and disorderly system under which society confiscates
Rent from common to individual uses, produces this result. That
maladjustment is the fundamental cause of poverty. And progress,
so long as the maladjustment continues, instead of tending to remove
poverty as naturally it should, actually generates and intensifies
it. Poverty persists with increase of productive power because
land values, when Rent is privately appropriated, tend to even
greater increase. There can be but one outcome if this continues:
for individuals suffering and degradation, and for society destruction.
Q35. What would be the effect of the single tax if you still
left railroad, telegraph, money, and other monopolies in private
A. The real strength of all monopolies is in land monopoly. Observe, for example,
the land holdings of the inside ring of such railroads as the Southern Pacific,
to which the interests of the road are corruptly made subordinate. Abolish land
monopoly, and the power of all the others will go, as Sampson's strength went
with the cutting of his hair. ... read the book
Charles B. Fillebrown: A
Catechism of Natural Taxation, from Principles of Natural
Q28. How are landlords privileged?
A. Because, in so far as their land tax is an "old" tax,
it is a burdenless tax, and because their buildings' tax is shifted
upon their tenants; most landlords who let land and also the tenement
houses and business blocks thereon avoid all share in the tax burden.
... read the whole
Winston Churchill: Land Price as
a Cause of Poverty (1909 speech in Parliament)
... I do not
think the Leader of the Opposition could have chosen a
more unfortunate example than Glasgow. He said that the
demand of that great community for land was for not more than forty
year. Is that the only demand of the people of Glasgow
for land? Does that really represent the complete economic and
natural demand for
the amount of land a population of that size requires
to live on? I will admit that at present prices it may be all that
they can afford
to purchase in the course of a year. But there are one
hundred and twenty thousand persons in Glasgow who are living in
tenements; and we are told that the utmost land
those people can absorb economically and naturally is forty acres
What is the explanation? Because
the population is congested in
the city the price of land is high upon the suburbs, and because the
price of land is high upon the suburbs the population must remain
congested within the city. That is the position which we are
complacently assured is in accordance with the principles which have
hitherto dominated civilised society.
when we seek to rectify this system, to break down this
unnatural and vicious circle, to interrupt this sequence of
unsatisfactory reactions, what happens? We are not confronted with
any great argument on behalf of the owner. Something else is put
forward, and it is always put forward in these cases to shield the
actual landowner or the actual capitalist from the logic of the
argument or from the force of a Parliamentary movement.
Sometimes it is the widow.
But that personality has been used to
exhaustion. It would be sweating in the cruellest sense of the word,
overtime of the grossest description, to bring the widow out again so
soon. She must have a rest for a bit; so instead of the widow we have
the market-gardener -- the
market-gardener liable to be disturbed on
the outskirts of great cities, if the population of those cities
expands, if the area which they require for their health and daily
life should become larger than it is at present.
What is the position disclosed
by the argument? On the one hand,
we have one hundred and twenty thousand persons in Glasgow occupying
one-room tenements; on the other, the land of Scotland. Between the
two stands the market-gardener, and we are solemnly invited, for the
sake of the market-gardener, to keep that great population congested
within limits that are unnatural and restricted to an annual supply
of land which can bear no relation whatever to their physical,
social, and economic needs -- and all for the sake of the
market-gardener, who can perfectly well move farther out as the city
spreads and who would not really be in the least injured. ...
the whole piece
Clarence Darrow: How
to Abolish Unfair Taxation (1913)
Everybody nowadays is anxious to help
do something for the poor, especially they who are on the backs of
the poor; they will do anything
that is not fundamental. Nobody ever dreams of giving the poor
a chance to help themselves. The reformers in this state have passed
a law prohibiting women from working more than eight hours
day in certain industries — so much do women love to
work that they must be stopped by law. If any benevolent heathen
see fit to
come here and do work, we send them to gaol or send them back
where they came from.
All these prohibitory laws are froth. You can only cure effects
by curing the cause. Every sin and every wrong that exists in the
world is the product of law, and you cannot cure it without curing
the cause. Lawyers, as a class, are very stupid. What would you think
of a doctor, who, finding a case of malaria, instead of draining
the swamp, would send the patient to gaol, and leave the swamp where
it is? We are seeking to improve conditions of life by improving
No man created the earth, but to a large
extent all take from the earth a portion of it and mould it into useful
things for the use
of man. Without land man cannot live; without access to it man
cannot labor. First of all, he must have the earth, and this he cannot
access to until the single tax is applied. It has been proven
by the history of the human race that the single tax does work, and
that it will work as its advocates claim. For instance, man turned
from Europe, filled with a population of the poor, and discovered
the great continent of America. Here, when he could not get profitable
employment, he went on the free land and worked for himself,
in those early days there were no problems of poverty, no wonderfully
rich and no extremely poor — because there was cheap land.
Men could go to work for themselves, and thus take the surplus off
the labor market. There were no beggars in the early days. It was
only when the landlord got in his work — when the earth monopoly
was complete — that the great mass of men had to look to
a boss for a job.
All the remedial laws on earth can scarcely help the poor
when the earth is monopolized. Men must live from the earth, they
the soil, dig the coal and iron and cut down the forest. Wise men
know it, and cunning men know it, and so a few have reached out their
hands and grasped the earth; and they say, "These mines of coal
and iron, which it took nature ages and ages to store, belong to
me; and no man can touch them until he sees fit to pay the tribute
... read the whole
About this matter of wages, George had
had other testimony besides the old printer’s. On his way to Oregon a dozen years before,
he fell in with a lot of miners who were talking about the Chinese,
and ventured to ask what harm the Chinese were doing as long as they
worked only the cheap diggings. “No harm now,” one of
the miners said, “but wages will not always be as high
as they are today in California. As
the country grows, as people come in, wages will go down
and some day or other white people will be glad to get those
that the Chinamen are working.” George said that this idea,
coming on top of what the printer had said, made a great impression
on him — the idea that “as
the country grew in all that we are hoping that it might grow
the condition of those who had to work for their living must
become, not better, but worse.” Yet in the short space
of a dozen years this was precisely what was taking place before
his own eyes.
Still, though his two great questions
became more and more pressing, he could not answer them. His thought
was still inchoate. He went
around and around his ultimate answer, like somebody fumbling
after something on a table in the dark, often actually touching it
being aware that it was what he was after. Finally it came to
him in a burst of true Cromwellian or Pauline drama out of “the
commonplace reply of a passing teamster to a commonplace question.” One
day in 1871 he went for a horseback ride, and as he stopped to
rest his horse on a rise overlooking San Francisco Bay —
“I asked a passing teamster, for want of something better
to say, what land was worth there. He pointed to some cows grazing
so far off that they looked like mice, and said, ’I don’t
know exactly, but there is a man over there who will sell some
land for a thousand dollars an acre.’ Like a flash
it came over me that there was the reason of advancing poverty
wealth. With the growth
, land grows in value, and the men who work
it must pay more for the privilege.”
Yes, there it was. Why had wages suddenly shot up so high in California
in 1849 that cooks in the restaurants of San Francisco got $500 a
month? The reason now was simple and clear. It was because the placer
mines were found on land
that did not belong to anybody
. Any one could go to them and
work them without having to pay an owner for the privilege. If the
lands had been owned by somebody, it would have been land-values
instead of wages that would have so suddenly shot up.
Exactly this was what had taken place
on these grazing lands overlooking San Francisco Bay. The Central Pacific
meant to make its terminus
at Oakland, the increased population would need the land around
Oakland to settle on, and land values had jumped up to a thousand dollars
an acre. Naturally, then, George reasoned, the more public improvements
there were, the better the transportation facilities, the larger
the population, the more industry and commerce — the more of
everything that makes for “prosperity” — the
more would land values tend to rise, and the more would wages
tend to fall.
George rode home thoughtful, translating
the teamster’s commonplace
reply into the technical terms of economics. He reasoned that
there are three factors
in the production of wealth
, and only three: natural resources,
labor, and capital. When natural resources are unappropriated,
obviously the whole yield of production is divided into wages,
which go to
labor, and interest, which goes to capital. But when they are
appropriated, production has to carry a third charge — rent
Moreover, wages and interest, when there is no rent, are regulated
strictly by free competition; but rent is a monopoly-charge,
and hence is always “all the traffic will bear.”
Well, then, since natural
are purely social in their origin, created
by the community, should not rent go to the community rather than
to the Individual? Why tax industry
and enterprise at all
— why not just charge rent?
There would be no need to interfere with the private ownership
resources. Let a man own all of them he can get his hands on,
and make as much out of them as he may, untaxed; but let him
community their annual rental value, determined simply by what
other people would be willing to pay for the use of the same
holdings. George could see justification for wages and interest,
on the ground
of natural right; and for private ownership of natural resources,
on the ground of public policy; but he could see none for the
private appropriation of economic rent. In his view it was
If he was right, then it also followed that as long as economic
rent remains unconfiscated, the
taxation of industry and enterprise is pure highwaymanry
, especially tariff
for this virtually delegates the government’s taxing
power to private persons.
George worked out these ideas in a tentative
way in a forty-eight page pamphlet with the title, “Our Land and Land Policy,
National and State,” which did not reach many readers,
but added something to his reputation as a tribune of the people.
The subject mulled in his mind through five years of newspaper work,
at the end of which he lost his paper and was once more on the ragged
edge. He had begun a magazine article on the cause of industrial
depressions, but was dissatisfied with it — one could do
nothing with the topic in so little space. What was needed was
a solid treatise
which should recast the whole science of political economy.
He felt that he could write this treatise,
but how were he and his family to live meanwhile? He had used his influence
on the Democratic
side in the last State campaign, and had been particularly instrumental
in selecting the governor; so he wrote to Governor Irwin, asking
him “to give me a place where there was little to do and something
to get, so that I could devote myself to some important writing.” The
governor gave him the State inspectorship of gas meters, which
was a moderately well-paid job, and a sinecure. This was in January,
1876; and in March, 1879, he finished the manuscript of a book
and Poverty: an Inquiry Into the Cause of Industrial Depressions,
and of Increase of Want With Increase of Wealth; the Remedy.
the whole article
Go to the work of Henry George himself and learn how many of the troubles
from which society still suffers, and suffers increasingly, are due
to the fact that a few have monopolized the land, and that in consequence
they have the power to dictate to others access to the land and to
its products -- which include waterpower, electricity, coal, iron and
all minerals, as well as the foods that sustain life -- and that they
have the power to appropriate to their private use the values that
the industry, the civilized order, the very benefactions, of others
produce. This wrong is at the very basis of our present social and
economic chaos, and until it is righted, all steps toward economic
recovery may be temporarily helpful while in the long run useless.
... read the whole speech
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
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
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
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?
WEALTH-ENVY FROM US!
As we see it, if someone is a rich "capitalist" who has
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
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. ... Read the
Karl Williams: Land
Value Taxation: The Overlooked But Vital Eco-Tax
I. Historical overview
II. The problem of sprawl
III. Affordable and efficient public transport
IV. Agricultural benefits
V. Financial concerns
VI. Conclusion: A greater
Appendix: "Natural Capitalism" -- A Case Study in Blindness to
Land Value Taxation
LVT and its 19th-century champion, Henry
achieved huge acclaim before being buried by the "purpose-built" body
of neoclassical economics financed largely by rent-seeking American
In one form or another, Henry George's writings on the need to tax land
values was preceded or endorsed by various biblical prophets, and by
Carlyle, Churchill, Einstein, Franklin, Aldous Huxley, Jefferson,
Lincoln, Locke, J.S. Mill, Paine, Penn, Rousseau, Bertrand Russell,
Adam Smith, Spencer, Spinoza, Sun Yat Sen, James Tobin, Tolstoy, Twain,
Voltaire, Winstanley, Frank Lloyd Wright and many more.
Just how this wisdom has been lost sight of is a long - too long for
this paper - and tragic story.
Here, for this conference, is the quirk - environmental
considerations played almost no part in the compelling endorsements
lavished on LVT! The main bill, then and now, is its powerful
explanation of the great causes of social injustice, with the second
billing going to an exposure of a whole range of economic
inefficiencies and deadweight losses of our present economic system,
which should more accurately be termed land-monopoly capitalism.
Support acts include libertarian ideals (non-intrusive tax systems),
effective Third World Aid, an end to tax evasion, contributions to
world peace, and an end to boom & bust cycles.
The appeal of LVT to some others is more its philosophical basis
how its implementation must turn the economy the right way up, such
that the cause of the "madness" (because completely unnecessary) of
involuntary unemployment is eliminated, which of necessity then leads
to the range of benefits just mentioned.
This is not a meandering departure from the subject of this
No significant, effectual solutions can be made to our environment if
the all-embracing economic system is only nibbled at, piecemeal, from
the angle of taxation alone.
LVT is not a mere taxation solution, but an integrated economic
solution, impacting on land management and cutting at the heart of
privilege and injustice. Yes, environmental tax reformers must indeed
address the looting of undervalued natural resources driven by
bourgeois habits of overconsumption. Let us not, however, overlook the
destruction resulting from short-term perspectives driven by poverty
and desperation. LVT deals with both worlds. read the entire article
Karl Williams: Social Justice In
Australia: ADVANCED KIT
MENACE OF MONOPOLY
Land effectively behaves as a monopoly good - the rent is not
determined by any cost of production, for it is already the highest
price that anyone will offer for it. There is no substitute for the
valuable land that individuals and businesses need - one can't go out
into the desert and haul in prime real estate!
The LVT would not somehow increase the willingness of anyone to
more for the land than before, nor would it in any way add to the
ability of the owner to demand more. To suppose that LVT could be just
offloaded on tenants is to suppose that landowners did not already get
for their land all that it brought. In other words, it supposes that,
whenever they wanted to, landowners could put up prices as they please!
Here's the paradoxical twist. As
far as one can predict, LVT would - in a country like Australia, with
so much valuable unused land - tend strongly to lower rents. Owners of
unused land who previously were holding out for higher prices would now
be driven by LVT to seek purchasers or tenants, thereby having to lower
the asking price. And, for land which is being rented, the
landowner would have to forfeit part or all of his cut to the
government. However the selling price of land, determined by net rents
to the landowner, would necessarily be much diminished (with full LVT
collection, the selling price would be around zero).
Radical as Geonomics is, here - contrary to appearances - we are
arguing about anything contentious or new. It is generally conceded by
knowledgeable economists that the landlord cannot transfer taxes levied
upon rent to the tenant. It is accepted that a tax upon anything of
which the supply is fixed or monopolised, and of which its cost of
production is not therefore a determining element (since it has no
effect in checking supply), does not increase prices and falls entirely
on the owner. ... Read the
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
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
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
Bill Batt: Who Says Cities are Poor? They Just
Don't Know How to Tax Their Wealth!
One could argue that the failure to tax
every bit of economic rent that accretes to land sites also has destructive
this is somewhat open to debate. Classical economists agree
that rent collection ought to be at least the sum of inflation plus
interest, otherwise the public is facilitating speculation in ways
urban configurations even more than they constitute an inequity.
But land sites frequently rise in market price far more than
the rate of inflation, especially in times (as is perhaps true today)
that a "bubble" in an economic cycle is in full flower.
Some municipalities, especially on the east and west coasts
of US, are today claiming to have increases in housing prices
as 20 percent per annum, a fever that surely will not last
and will be especially destructive when it collapses. Land
values are what create that bubble; buildings are subject to continuing
depreciation just like cars, computers, refrigerators or any other
manufactured (capital) item. Recovering the economic rent reduces
and perhaps even eliminates the speculative bubbles and swings that
(some argue) account for economic cycles, fostering stability and
regularity in economic planning and development that make for improved
financial health to all.
This reality brings into stark relief
the choices which local political leaders have. They may suggest increasing
taxes on economic rent
(i.e., on land value) or recognize that most property owners
are counting on treating their homes and other property not as places
to live and work so much as investments and then lament the poverty
of their cities. Owners expect to reap a gain from their property
when they sell, and they are often positioned to make any threat
to that entitlement politically unpalatable. Farmers sometimes
selling their farms as their retirement security. Homeowners
sell with the expectation that this gain will provide them the means
enter long term end-of-life facilities if necessary. Heirs also
oppose that recapture just as with a reverse mortgage. But
for every long-term property owner that walks away with a lifetime's
rent attached to a land title, there are just as many — if
not more — young households or emerging businesses that
are prohibited from acquiring a property because of the prohibitively
expensive costs. In this sense, a title to a socially created
of rental benefits constitutes a monopoly privilege to an unearned
windfall gain for a lucky few. It is both unjust and is socially
and economically destructive to the greater good. ... read
the whole article
Karl Williams: Two
NEOCLASSICAL LAND-MONOPOLY CAPITALIST
You have two cows and several hectares of land.
Your neighbour is a single mother, has no cows, no land and works a part-time
You tell her that if she works longer and harder she could buy one of your
cows and become an enterprising capitalist. So she takes on full-time work
so that, after 3 months, she has saved enough money to buy one of your cows.
But what use is a cow (or anything, for that matter) without a plot of your
land, which is now worth $20,000?
So your neighbour takes on a night shift in addition to her day job, leaving
for work after the kids are in bed and arriving home just in time to get
them dressed for school.
After a year she has saved enough money to buy that land.
Expressing great regret you explain that, in the meantime, the taxes on
her income have paid for the infrastructure that have boosted the value of
your land, so that the current market price for that plot is now worth $30,000.
Back to the grindstone, baby!
Another year of sweat and toil follows, after which she returns with the
money. But, with hand on heart, you break the news that economic circumstances
have recently driven most single and married mothers to bring in an extra
income in order to save for the ever-escalating price of land. As no-one’s
making any more land, the greater number of bidders has pushed up the price
of the fixed amount of land (this is called a “healthy, buoyant property
market”). It’s now worth $40,000 but it would be a lot easier
if she just got a bank loan, you tell her. However, all those eager bidders
for land have also bid up the rate of interest they’re prepared to
suffer, so that interest rates are now prohibitive. Your neighbour collapses
in tears at your feet, but what can you do? – you didn’t invent
the system! Just as our poor mum relents and considers taking out a mortgage,
she finally gets some good news – in a surprise move, the Reserve Bank
has decided to make it easier on prospective home-owners by reducing interest
rates. However, this has had the effect of making the owning of property
more attractive, so – immediately the interest rate decision is announced – landowners
raise the selling price of land. The “fair market price” of that
plot is now $50,000.
However, under political pressure because of the unaffordability of property,
the federal government announce that it will institute a First Home Owners’ grant
of $7,000. Suddenly that plot is selling for $57,000.
You have two cows and several acres of land.
Your neighbour is a single mother, has no cows, no land and works a minimum
You’ve had an amazing vision wherein you see the geoist paradigm
in all its glory and realise that all other reforms are just band-aids, so
you become an activist with ProsperAustralia. You share your insight with
your neighbour and so everyone pulls together to successfully reform our
insane tax laws and system of land tenure. As a result:
(1) your neighbour can keep all of her hard-earned income, and
(2) those who have enclosed substantial amounts of the Common Wealth for
their own private domain now pay fair land value taxation (LVT) to society.
Your LVT bill arrives and you realise you have been holding more land than
you really need, so auction off the title to your land and the improvements
on it. Because of genuine tax relief, your neighbour can now afford to buy
And so - with LVT and trust and angel dust - they all live happily ever after. ... read
the whole article
Thomas Flavin, writing in The
Now, it is quite true that all taxes of whatever nature are paid
out of the products of labor. But must they be for that reason
a tax on labor products. Let us see.
I suppose you won't deny that a unit of labor applies to different
kinds of land will give very different results. Suppose that a
unit of labor produces on A's land 4, on B's 3, on C's 2 and on
D's 1. A's land is the most, and D's is the least, productive land
in use in the community to which they belong. B's and C's represent
intermediate grades. Suppose each occupies the best land that was
open to him when he entered into possession. Now, B, and C, and
D have just as good a right to the use of the best land as A had.
Manifestly then, if this be the whole story, there cannot be equality
of opportunity where a unit of labor produces such different results,
all other things being equal except the land.
How is this equality to be secured? There is but one possible
way. Each must surrender for the common use of all, himself included,
whatever advantages accrues to him from the possession of land
superior to that which falls to the lot of him who occupies the
In the case stated, what the unit of labor produces for D, is
what it should produce for A, B and C, if these are not to have
an advantage of natural opportunity over D.
Hence equity is secured when A pays 3, D, 2 and C, 1 into a common
fund for the common use of all--to be expended, say in digging
a well, making a road or bridge, building a school, or other public
Is it not manifest that here the tax which A, B and C pay into
a common fund, and from which D is exempt, is not a tax on their
labor products (though paid out of them) but a tax on the superior
advantage which they enjoy over D, and to which D has just as good
a right as any of them.
The result of this arrangement is that each takes up as much of
the best land open to him as he can put to gainful use, and what
he cannot so use he leaves open for the next. Moreover, he is at
no disadvantage with the rest who have come in ahead of him, for
they provide for him, in proportion to their respective advantages,
those public utilities which invariably arise wherever men live
in communities. Of course he will in turn hold to those who come
later the same relation that those who came earlier held to him.
Suppose now that taxes had been levied on labor products instead
of land; all that any land-holder would have to do to avoid the
tax is to produce little or nothing. He could just squat on his
land, neither using it himself nor letting others use it, but he
would not stop at this, for he would grab to the last acre all
that he could possibly get hold of. Each of the others would do
the same in turn, with the sure result that by and by, E, F and
G would find no land left for them on which they might make a living.
So they would have to hire their labor to those who had already
monopolized the land, or else buy or rent a piece of land from
them. Behold now the devil of landlordism getting his hoof on God's
handiwork! Exit justice, freedom, social peace and plenty. Enter
robbery, slavery, social discontent, consuming grief, riotous but
unearned wealth, degrading pauperism, crime breeding, want, the
beggar's whine, and the tyrant's iron heel.
And how did it all come about? By the simple expedient of taxing
labor products in order that precious landlordism might laugh and
grow fat on the bovine stupidity of the community that contributes
its own land values toward its own enslavement!
And yet men vacuously ask, "What difference does it make?"
O tempora! O mores! To be as plain as is necessary, it makes this
- First, it robs the community of its land values;
- second, it robs labor of its wages in the name of taxation;
- third, it sustains and fosters landlordism, a most conspicuously
- fourth, it exhibits willing workers in enforced idleness; beholding
their families in want on the one hand, and unused land that
would yield them abundance on the other.
This last is a difference that cries to heaven for vengeance,
and if it does not always cry in vain, will W. C. Brann be able
to draw his robe close around him and with a good conscience exclaim, "It's
none of my fault; I am not my brother's keeper."
Bill Batt: Comment on
Parts of the NYS Legislative Tax Study Commission's 1985 study “Who
Pays New York Taxes?”
Little justification exists for taxing buildings, or improvements
of any sort, so this question is easily disposed of. The practice
is explained largely as a matter of historical inertia. Only in
the recent century or two have buildings represented any significant
capital value; prior to the rise of major cities, the value of
real property lay essentially in land. American cities today typically
record aggregate assessed land values – at least when the
valuations are well-done – at about 40% to 60% of total taxable
value, that is, of land and buildings taken together.31 Skyscrapers
reflect enormous capital investment, and this expenditure is warranted
because of the enormous value of locational sites. Each site gets
its market price from the fact that the total neighborhood context
creates an attractive market presence and ambience. By taxing buildings,
however, we impose a penalty on their optimum development as well
as on the incentives for their maintenance. Moreover, taxes on
buildings take away from whatever burden would otherwise be imposed
on sites, with the result that incentives for their highest and
best use is weakened. Lastly, the technical and administrative
challenges of properly assessing the value of improvements is daunting,
particularly since they must be depreciated for tax and accounting
purposes, evaluated for potential replacement, and so on. In fact
most costs associated with administration of property taxation
and appeal litigation involve disputes over the valuation of structures,
not land values.
Land value taxation, on the other hand, overcomes all these obstacles.
Locations are the beneficiaries of community services whether they
are improved or not. As has been forcefully argued by this writer
and others elsewhere,32 a tax on land value conforms to all the
textbook principles of sound tax theory. Some further considerations
are worth reviewing, however, when looking at ground rent as a
flow rather than as a “present value” stock. The technical
ability to trace changes in the market prices of sites – or
as can also be understood, the variable flow of ground rent to
those sites – by the application of GIS (geographic information
systems) real-time recording of sales transactions invites wholesale
changes in the maintenance of cadastral data. The transmittal of
sales records as typically received in the offices of local governments
for purposes of title registration over to Assessors’ offices
allows for the possibility of a running real-time mapping of market
values. Given also that GIS algorithms can now calculate the land
value proportions reasonably accurately, this means that “landvaluescapes” are
easily created in ways analogous to maps that portray other common
geographic features. These landvaluescapes reflect the flow of
ground rent through local or regional economies, and can also be
used to identify the areas of greatest market vitality and enterprise.
The flow of economic rent can easily be taxed in ways that overcomes
the mistaken notion that it is a stock. Just as income is recognized
as a flow of money, rent too can (and should) be understood as
The question still begs to be answered, “why tax land?” And
what happens when we don’t tax land? Henry George answered
this more than a century ago more forcefully and clearly, perhaps,
than anyone has since. He recognized full well that the economic
surplus not expended by human hands or minds in the production
of capital wealth gravitates to land. Particular land sites come
to reflect the value of their strategic location for market exchanges
by assuming a price for their monopoly use. Regardless whether
those who acquire title to such sites use them to the full extent
of their potential, the flow of rent to such locations is commensurate
with their full capacity. This is why John Stuart Mill more than
a century ago observed that, “Landlords grow richer in their
sleep without working, risking or economizing. The increase in
the value of land, arising as it does from the efforts of an entire
community, should belong to the community and not to the individual
who might hold title.”33 Absent its recovery by taxation
this rent becomes a “free lunch” to opportunistically
situated titleholders. When offered for sale, the projected rental
value is capitalized in the present value for purposes of attaching
a market price and sold as a commodity. Yet simple justice calls
for the recovery in taxes what is the community’s creation.
Moreover, the failure to recover the land rent connected to sites
makes it necessary to tax productive activities in our economy,
and this leads to economic and technical inefficiency known as “deadweight
loss.”34 It means that the economy performs suboptimally.
Land, and by this Henry George meant any natural factor of production
not created by human hands or minds, is ours only to use, not to
buy or sell as a commodity. In the equally immortal words of Jefferson
a century earlier, “The earth belongs in usufruct to the
living; . . . [It is] given as a common stock for men to labor
and live on.”35 This passage likely needs a bit of parsing
for the modern reader. The word usufruct, understood since Roman
times, has almost passed from use today. It means “the right
to use the property of another so long as its value is not diminished.”36
Note also that Jefferson regarded the earth as a “common
stock;” not allotted to individuals with possessory titles.
Only the phrase “to the living” might be subject to
challenge by forward-looking environmentalists who, taking an idea
from Native American cultures, argue that “we do not inherit
the earth from our ancestors; we borrow it from our children.” The
presumption that real property titles are acquired legitimately
is a claim that does not withstand scrutiny; rather all such titles
owe their origin ultimately to force or fraud.37
If we own the land sites that we occupy only in usufruct, and
the rent that derives from those sites is due to community enterprise,
it is not a large logical leap to argue that the community’s
recovery of that rent should be the proper source of taxation.
This is the Georgist argument: that the recapture of land rent
is the proper – indeed the natural – source of taxation.38
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