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John Stuart Mill
John Stuart Mill (1806-1873), in Principles of Political Economy
with some of their Applications to Social Philosophy, 1848.
found in Book V, Chapter II: On the General Principles of Taxation
Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)
GREAT as John Stuart Mill was and pure as he was — warm heart and noble mind — he yet never saw the true harmony of economic laws, nor realized how from this one great fundamental wrong flow want and misery, and vice and shame. Else he could never have written this sentence: "The land of Ireland, the land of every country, belongs to the people of that country. The individuals called landowners have no right in morality and justice to anything but the rent, or compensation for its salable value."
Henry George: The Common Sense of Taxation (1881 article)
Herbert J. G. Bab: Property Tax -- Cause of Unemployment
Ricardo believed that ground rents and the value of land have a tendency to rise continuously and that this benefits solely the landowners. The progress of industrialization and urbanization in the second half of the 19th century resulted in a rapid increase in the value of urban land and the owners of such land reaped tremendous profits. This led John Stuart Mill to observe, that "Only the landowners grow richer, as it were in their sleep without working, risking and economizing". He called for the taxation of land in order to recapture the unearned increment accruing to the land owners.
The apostle of land taxation is Henry George. In his famous book Progress and Poverty he develops his single tax theory. He tries to show that poverty and unemployment and other evils are caused by the land monopolists. Henry George's theory is similar to that developed by John Stuart Mill. Land values are based on ground rents which are created by the community and not by the land owners. Therefore the community is justified in recapturing these rents by a single tax on land. ...
If John Stuart Mill or Henry George would be alive today, they would be disappointed that the taxation of the unearned increment in land values has not made more progress. They would be surprised that the rise in urban land values has not been as steep as they had expected. Yet the universal use of automobiles has in an unforeseeable way multiplied the land available for residential use. It has made possible the exodus of a large pan of the middle class out of our towns into suburban areas. Thus the invention of the automobile has upset the dire predictions and expectations of the economists who advocated the taxation of land. Read the whole article
The Most Rev. Dr Thomas Nulty, Roman Catholic Bishop of Meath (Ireland): Back to the Land (1881)
... Mr. Mill, in his great work on Political Economy, after having accepted the universally received definition of property exactly as I have given it, says: "The essential principle of property being to assure to all persons what they have produced by their labour and accumulated by their abstinence, this principle cannot apply to what is not the produce of labour, the raw material of the earth." And again: "When the sacredness of property is talked of, it should always be remembered that any such sacredness does not belong in the same degree to landed property. No man made the land: it is the inheritance of the whole species."
In the remainder of this chapter Mr. Mill lectures the proprietors of land on their obligations and responsibilities to society in the management of it, and consequently he must be addressing himself to owners who have only the right of usufruct in their lands. Such admonitions, if addressed to men who had an absolute right of private property in land, would be simply an impertinence, as they would not be obliged to account to him or to anyone else for "what they did with their own." Further on Mr. Mill adds: "Those who think that the land of a country exists for the sake of a few thousand landowners, and that as long as rents are paid society and government have fulfilled their function, may see in this consummation a happy end to Irish difficulties. But this is not a time, nor is the human mind now in a condition in which such insolent pretensions can be maintained. The land of Ireland, the land of every country, belongs to the people of that country." ...
The Landlord the Greatest Burden on the Land.
The land is a commodity that strictly belongs to this class. It is limited in extent, and no human power can enlarge or extend its area. The competition for it is excessive, the competitors struggling for its attainment -- not for the purpose of satisfying a taste for the fine arts, or to gratify a passion for the rare or beautiful, but to secure a necessary means of existence: for they must live on and by the land, or they cannot live at all. The owner, therefore, of that land can put on it any rent he pleases, and the poor people competing for it have no choice but to accept his terms or die in a ditch or a poorhouse. Under the present system of Land Tenure, the owners are not only enabled, but actually exact for the use of the land the last shilling the tenant is able to pay, leaving him only what is barely sufficient to keep him from dying.
Mr. Mill, who is the highest of all authorities on this subject, thus writes on the letting of land as it is actually carried out in Ireland: "With individual exceptions (some of them very honourable ones) the owners of Irish estates do nothing for the land but drain it of its produce. What has been epigrammatically said in the discussions on 'peculiar burdens' is literally true when applied to them, that the greatest 'burden' on the land is the landlords. Returning nothing to the soil, they consume its whole produce, minus the potatoes strictly necessary to keep the inhabitants from dying of famine." Read the whole letterDan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?
Classical liberals recognized that exclusive access to land, and especially to more land than one was using, was a privilege that should be paid for, thereby eliminating the need for taxes. It is not a fee for using land, but a fee for the state privilege of denying use of that land to everyone else.
Today's land value tax advocates consider graduated land value tax to be unnecessary and problematic, leading to artificial subdivision (and phony subdivision) of land. The point is that Jefferson, to whom libertarians pay homage, considered land monopoly a great evil and land value tax a remedy, as did many other classical liberals:
Ground rents are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Ground rents are, therefore, perhaps a species of revenue which can best bear to have a peculiar tax imposed upon them. --Adam Smith
What is Land Rent?
John Houseman, an actor perhaps most widely known as Professor Kingsfield in the long-running TV series, The Paper Chase, later became the pitchman for Smith Barney. In that advertisement, his tag line was "We make money the old-fashioned way -- we earn it."
That we should earn our money rather than live off the efforts of others seems a simple enough moral tenet. But it seems to have lost its cogency in contemporary economic thought. More than a century ago John Stuart Mill noted 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.(1)
Today, on the other hand, the unearned surplus which classical economists called rent attaches to monopoly titles -- largely the scarce goods and services of nature like locational sites, and has totally disappeared from economic calculus. Yet this is the primary vehicle by which wealth is captured by economic elites. If government recaptured the socially-created economic rent from land sites that comes from the investment of the collective community, we could eliminate other taxes that are both more onerous and create a drag on the economy that makes us all poorer. There are many websites that explain how this can be done, ways that not only beget greater economic efficiency but also bring about economic justice.(2) The surplus economic rent that derives from community effort is its rightful entitlement.
Where does economic rent most tend to lodge? In the center of cities where people are. And also proximate to heavy social investments -- such as railroad and metro stations, public and office buildings, hotels and conference centers, and anywhere there is high traffic in personal or market exchanges. The land value in New York City is higher than all the rest of the New York state combined, even though it is only a minute fraction of the area. One 9-acre site south of the United Nations Building was recently sold to a developer intent on building luxury condominiums facing the East River. That site sold for $680 million, and would have been higher had the existing structure, an obsolete power plant, not have to be razed.(3) Land values in any given area tend to rise and fall together, and tend also to form a contour somewhat comparable to a topographical survey map. In a city's center are the highest value locations, analogous to a mountain peak. Once one departs from that center, land values fall in direct proportion to the value of their use, made more or less attractive by whatever social attributes are provided in the proximate areas. Two illustrations from small and medium sized cities in the United States illustrate the point. ... 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