Wealth and Want
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Land Redistribution?

"The neoclassical economists' view of their proper role is rather like that in The Realtor's Oath, which includes a vow 'To protect the individual right of real estate ownership.' The word 'individual' is construed broadly to include corporations, estates, trusts, anonymous offshore funds, schools, government agencies, institutions, partnerships, cooperatives, the Duke of Westminster, the Sultan of Brunei, the Medellin Cartel, Saddam Hussein, congregations, Archbishops, families (including criminal families) and so on, but 'individual' sounds more all-American and subsumes them all. This is a potent chant that stirs people to extremes of self-righteousness and siege mentality when challenged." - Professor Mason Gaffney, US Geonomic academic

Henry George: The Wages of Labor
The same hopelessness attends the suggestion that working people should be encouraged by the State to obtain a share of the land. It is proposed that, as is being attempted in Ireland, the State shall buy out large land owners in favour of small ones, thus establishing peasant proprietors.

Supposing that this can be done, even to a considerable extent, what will be accomplished save to substitute a larger privileged class for a smaller privileged class? What will be done for the still larger class that must remain the laborers of the agricultural districts, the workmen of the towns, the proletarians of the cities?

Is it not true, as Professor De Laveleye says, that in such countries as Belgium, where peasant proprietary exists, the tenants (for there still exist tenants) are rack-rented with a mercilessness unknown in Ireland? Is it not true that in such countries as Belgium the condition of the mere laborer is worse than it is in Great Britain, where large ownerships obtain? And if the State attempts to buy up land for peasant proprietors, will not the effect be, what is seen today in Ireland, to increase the market value of land and thus make it more difficult far those. not so favoured, and for those who will came after, to get land?  ...  read the whole article

Henry George: The Land for the People (1889 speech)

Now, rent is a natural and just thing. For instance, if we in this room were to go together to a new country and we were to agree that we should settle in that new country on equal terms, how could we divide the land up in such a way as to insure and to continue equality? If it were proposed that we should divide it up into equal pieces, there would be in the first place this objection, that in our division we would not fully know the character of the land; one man would get a more valuable piece than the other. Then as time passed the value of different pieces of land would change, and further than that if we were once to make a division and then allow full and absolute ownership of the land, inequality would come up in the succeeding generation. One man would be thriftless, another man, on the contrary, would be extremely keen in saving and pushing; one man would be unfortunate and another man more fortunate; and so on. In a little while many of these people would have parted with their land to others, so that their children coming after them into the world would have no land. The only fair way would be this-- that any man among us should be at liberty to take up any piece of land, and use it, that no one else wanted to use; that where more than one man wanted to use the same piece of land, the man who did use it should pay a premium which, going into a common fund and being used for the benefit of all, would put everybody upon a plane of equality. That would be the ideal way of dividing up the land of a new country.

THE problem is how to apply that to an old country. True we are confronted with this fact all over the civilized world that a certain class have got possession of the land, and want to hold it. Now one of your distinguished leaders, Mr. Parnell in his Drogheda speech some years ago, said there were only two ways of getting the land for the people. One way was to buy it; the other was to fight for it. I do not think that is true. I think that Mr. Parnell overlooked at that time a most important third way, and that is the way we advocate.

That is what we propose by what we call the single tax. We propose to abolish all taxes for revenue. In place of all the taxes that are now levied, to impose one single tax, and that a tax upon the value of land. Mark me, upon the value of land alone -- not upon the value of improvements, not upon the value of what the exercise of labor has done to make land valuable, that belongs to the individual; but upon the value of the land itself, irrespective of the improvements, so that an acre of land that has not been improved will pay as much tax as an acre of like land that has been improved. So that in a town a house site on which there is no building shall be called upon to pay just as much tax as a house site on which there is a house.  Read the whole speech

Nic Tideman: Basic Tenets of the Incentive Taxation Philosophy

Applications Abroad as Well as at Home
As important as our ideas are for the justice and efficiency of the American economy, their application is even more important in less developed countries, where often 80% of the land is held by 3% of the population. To give all the citizens of these countries chances to make something of their lives, it is extremely important to equalize access to land, not by redividing the land (which inevitably winds up putting land into the hands of people who cannot use it well) but by requiring any one who uses land to pay according to the unimproved value of the land that he or she uses. To bring this message to the world, we must first apply it to ourselves. ...  Read the whole article

Karl Williams:  Social Justice In Australia: INTERMEDIATE KIT
Certainly there have been endless attempts at land reform. "Viva la revolución!" has been the cry all through Latin America, for instance, but the lot of the average peasant has changed little, even with the best will in the world behind land reform.

Here's the problem. So-called land reform has always been seen as land redistribution, based on the same form of outright land ownership. But there are three cogent reasons why land redistribution, as remarked above, does not work and never will.
  • Firstly, to redistribute land means to divide it up. But land is so vastly different as to make this task utterly impractical, what with wilderness, marginal agricultural land, good agricultural land, outer suburban land and prime real estate in the heart of the cities. Where's Solomon to wisely divide it all up, with the added problem of buildings and improvements that some people have built and others haven't? Would A have to get 100 square kilometres of desert to match B's parcel of two square metres opposite the GPO?
  • Secondly, even if the different values were measured at a given moment, they would immediately begin to change, and would continue to do so. Even if everyone might start with a parcel of land equal in value to everyone else's, those values would at once begin to shift. In the first year a dam is built here, a school is closed down there, and roads are built everywhere. Appreciation and depreciation would continue year after year, and in no time everyone's "equal" parcels would have ceased to be such. A great way to operate a casino, but what sort of way to run a society?
  • Thirdly, even if you could wave a magic wand and somehow take into account the different and ever-changing values of land, what about new entrants like the newborn of the next and future generations? And what do immigrants get?
Besides the Big Three reasons above, there are two minor ones worth mentioning.
  • After the land "reform," would selling, speculating and profiteering go on as before, or would all have to stick to their allocated plots for the rest of their lives?
  • It would require a really squeaky-clean government for the "casino" of changing land values not to turn into a den of political influence and corruption. Most likely, development would be skewed towards the land of the politically empowered. Or maybe the kleptocracy would get the tip-off to buy land where development is going to take place.
None of the problems above would exist with LVT, the implementation of which would be far less revolutionary than that of historical land reforms. We need land reform here in Australia, of course - but in the Third World where poverty is so great, matters are urgent. What good has foreign aid done over all these years, when you look at the disparities of wealth in recipient countries? Why do governments even today (as in Zimbabwe) still go down the path of land reform whereby land is doled out to a handful of government supporters?

We all know the proverb: Give a man a fish and he'll be fed for a day, but teach a man to fish and he'll feed himself for a lifetime. One would assume that Western governments, the World Bank and the IMF also knew it, but they continue to hand out fish instead. ... Read the entire article

Mason Gaffney: Land as a Distinctive Factor of Production
The initial distribution of land - the origin of property in land - is military, legal, and political, not economic. The prime business of nations throughout history has been to gain and defend land. What was won by force has no higher sanction than lex fortioris, and must be kept and defended by force.

After land is appropriated by a nation the original distribution is political. The nature of societies, cultures and economies for centuries afterwards are moulded by that initial distribution, exemplified by the differences between Costa Rica (equal partition) and El Salvador with its fabled "Fourteen Families" (Las Catorce), or between Canada and Argentina.

Political redistribution also occurs within nations, as with the English enclosures and Scottish "clearances", when one part of the population in effect conquered the rest by political machinations, and took over their land, their source of livelihood. Reappropriation and new appropriation of tenures is not just an ancient or a sometime thing but an on-going process. This very day, proprietary claims to water sources, pollution rights, access to rights of way, radio spectrum, signal relay sites, landing rights, beach access, oil and gas, space on telephone and power poles(e.g. for cable TV), taxi licences, etc. are being created under our noses. In developing countries of unstable government the current strong man often grants concessions to imperialistic adventurers who can bolster his hold on power by supplying both cash up front, and help from various US and UN agencies from the IMF to the United States Marine Corps.

Ordinary economic thinking today would have it that a nation that distributes land among private parties by "selling to the highest bidder" is using an economic method of distribution. Such thinking guides World Bank and IMF economists as they advise nations emerging from communism on how to privatise land. The neutrality is specious, at best. Even selling to the highest bidder is a political decision, as 19th century American history makes clear.

The right to sell was won by force, is not universally honoured, and must be kept by continuous use of force. In practice, selling for cash up front reserves most land for a few with front-money advantage, inside information, good contacts, corrupt aids, etc. The history of disposal of US public domain leaves no doubt about this and it is still going on with air rights, water, radio, landing rights, fishing licenses, etc. Choices being made currently are just as tainted as those of 19th century history.

Selling land in large blocks under frontier conditions is to sell at a time before it begins yielding much if any rent. It is bid in by those few who have large discretionary funds of patient money. Politicians, meantime, treat the proceeds as current revenues used to hold down other taxes today, leaving the nation with inadequate revenues in the future.

The ability to bid high does not necessarily come from legitimate savings. The early wealth of Liverpool came from the slave trade. High bidders for many properties today are  middle eastern potentates who neither produced nor saved the wealth they control. Other high bidders are criminals, who find the "sanctity of property" a splendid route for laundering their gains, and a permanent shelter against further prosecution.  Read the whole article
Henry George:  The Land Question (1881)

A little Island or a little World
IMAGINE an island girt with ocean; imagine a little world swimming 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 dependent.

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


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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper