Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
Home Essential Documents Themes All Documents Authors Glossary Links Contact Us

 

Panacea?

If you listen to a Georgist share his or her ideas for a while, you might come away with the notion that Georgists consider George's remedy to be a panacea — a cure-all. 

In fact, if asked, few of us would make that claim.  But most of us believe that the huge — and largely invisible — distortion that George's remedy would remove is an underlying cause of a wide range of social and economic problems in our beloved country, and that we would as a society be far better off were we to implement his reform.  Would all problems go away?  No, of course not.  But an amazing range of our most troubling problems would be considerably lightened, and a great deal of human misery eased..  

There is a line somewhere about the purpose of religion being to comfort the afflicted and to afflict the comfortable.   George's reform would provide comfort to many who are afflicted — including many who can't pinpoint the source of their affliction — and perhaps afflict some of the comfortable — those whose comfort derives from their privileged ability to claim, as if it were their own, the fruits of the labor of others.

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

Q1. Do you regard the single tax as a panacea for all social disease?
A. When William Lloyd Garrison announced his conversion to the single tax in a letter to Henry George, he took pains to state that he did not believe it to be a panacea, and Mr. George replied : "Neither do I; but I believe that freedom is." Your question may be answered in the same way. Freedom is the panacea for social wrongs and the ills they breed, and the single tax principle is the tap-root of freedom. ... read the book

Lindy Davies: Land and Justice

I'm here today as a "Single Taxer". If you don't recall quite what that is, let me first say that it’s NOT Steve Forbes’s “flat tax!” No. The Single Tax is actually a comprehensive program for economic justice and environmental sustainability. It was stated most memorably by the American economist Henry George in his 1879 book Progress and Poverty — and affirmed by a great many important thinkers, before and since. The idea is for society to collect the rental value of land for public revenue — and to abolish all other taxes on the production and exchange of wealth. It came to be known at the “Single Tax” because of this proposal that the rent of land should be the sole source of public revenue.

Single Taxers have been ridiculed somewhat, over the years, for peddling a panacea, offering a cure for poverty, depressions, urban blight, potholes, the common cold and the heartbreak of psoriasis. Well, I don’t claim to have a cure for every bad thing. But I do want to talk to you making the necessary economic arrangements to create a just society, in which there would be equal opportunity for all, and in which we could confidently look ahead to all our children’s futures.

Single taxers have also caught some grief for always saying “It’s all about the land!”

But I’m not going to apologize for that! I want to explain to you why the issues of economic justice and sustainability actually ARE all about the land. ... read the whole speech

John Dewey: Steps to Economic Recovery

I do not claim that George's remedy is a panacea that will cure by itself all our ailments. But I do claim that we cannot get rid of our basic troubles without it. I would make exactly the same concession and same claim that Henry George himself made:

"I do not say that in the recognition of the equal and unalienable right of each human being to the natural elements from which life must be supported and wants satisfied, lies the solution of all social problems. I fully recognize that even after we do this, much will remain to do. We might recognize the equal right to land, and yet tyranny and spoilation be continued. But whatever else we do, as along as we fail to recognize the equal right to the elements of nature, nothing will avail to remedy that unnatural inequality in the distribution of wealth which is fraught with so much evil and danger. Reform as we may, until we make this fundamental reform, our material progress can but tend to differentiate our people into the monstrously rich and frightfully poor. Whatever be the increase of wealth, the masses will still be ground toward the point of bare subsistence — we must still have our great criminal classes, our paupers and our tramps, men and women driven to degradation and desperation from inability to make an honest living." ... read the whole speech

 

Mason Gaffney: Henry George 100 Years Later: The Great Reconciler

In 1879, George electrified the world by identifying one underlying cause for two great economic plagues:
  • chronic poverty arising from insufficient demand for labor, and
  • cycles of boom and bust.

These twin plagues arose from concentrated ownership of land, compounded by land speculation. Large landowners and speculators (often one and the same) held the best land idle or underused, forcing labor onto marginal land and driving down wages. Collapse of speculative land price bubbles caused periodic slumps.

(By "land" George meant exclusive rights to use natural resources in a specified territory. It included mining, water, fishing, and timber rights, road and rail rights-of way, and some patents. George emphasized the high value and productivity of urban land, which facilitated communication and trade. Today, we would add to "land" such items as taxi medallions, telecommunications licenses and pollution "rights".) ...

Neo-classical economists give us only a hard choice: we may have equity, or efficiency, but not both. By contrast, George's program reconciles equity and efficiency. Think of it! George takes two polar philosophies, collectivism and individualism, and composes them into one solution. He cuts the Gordian knot. Like Keynes after him, George inspires us by saying, "Forget the bitter tradeoffs; we can have it all!"   ... read the whole article



Mason Gaffney: George's Economics of Abundance: Replacing dismal choices with practical resolutions and synergies

It is part of George's genius that his proposals solve one problem by resolving it with another, turning two problems into one solution. It is something like tuning up the orchestra for a concert, turning dissonance into harmony, and keeping the beat together, turning cacaphony into rhythm. It is the mark of good solutions that they reconcile and resolve, rather than simply "trade-off." 1

1 If you ever immerse yourself in mathematics deeply enough to find different proofs of the same proposition, you recognize the epiphany when it all comes together, and everything supports and confirms everything else. Then you know you have the right answer. Good ideas and good policies support and reinforce each other.

That is what George means when he writes that "the laws of the universe are harmonious." That is what Founding Fathers like Washington, Jefferson and Franklin meant by a "natural order." Like them, George is a deist in spirit, a believer in the consistency of the universe. The concept that some things are more "natural" than others is not arbitrary. The clue that one has found the "natural" law is that it makes forces harmonize and team together instead of clashing, and neutralizing each other. 2 The principle of constructive synthesis - a touch of Hegel - is another way of perceiving the value of turning cacaphony into harmony. 3

2. In this view, the "natural harmony" is recognized by its power to reconcile. Deadlocks and standoffs resolve into teamwork, yielding gains at little or no cost. Today, philosophers may avoid terms like "natural law." Call it what you will, it is a powerful idea and a worthy goal. Fashions and terms change: principles endure.

3. Richard Noyes recently published Now the Synthesis. A synthesis is a reconciliation and resolution, a harmonious blending of the best of what had appeared (or had been made to appear) to be clashing forces between which hard choices must be made.

Economists today offer us mainly "trade-offs" and hard choices. For every good thing we must give up another, so net gains are just marginal. That is the approved posture: it makes one seem hard-headed, worldly, and practical. Too much positive thinking sounds suspiciously optimistic, and invites rebellious cynical muttering that "there ain't no free lunch." It goes back at least to Malthus, who offered mankind the hard choice of food vs. sex. That sort of thinking is what made people call economics "the dismal science."

A true resolution is much more to be desired. To get one good thing we get a second one as well. It is remarkable how many "hard choices" are turned into benign resolutions in George's program. He is a genius at finding the essential harmony of interests now concealed beneath confused thinking. Instead of a dismal trade-off, there is a "free lunch," or "synergy": the whole is greater than the sum of its parts. Such grand resolutions, when possible, deserve to be called "true win-win solutions." 4

4. As commonly used today, "win-win solution" is just a euphemism for a trade-off, in which the loser of a resource "wins" by getting paid. Often it is worse: the "winnings" of one or both parties represent resources stolen from the public domain, while concealing the loss to the public.

The most obvious such true win-win solution is putting the unemployed to work. Recognizing this truth is no monopoly of George: Keynesian economists long insisted that there is no social cost in putting the unemployed to work. It is a measure of the bankruptcy and myopia of many economists today that even those voices are muted, and that obvious gain is denied: working is called a "sacrifice of leisure," just another trade-off. Unemployment has become "job-searching." 5 It is more likely a sacrifice of burglary, vandalism, drug-use, jail time, loitering, looting, collecting welfare, and sullen misery. Trading such bad time for the gratification, pride, on-the-job learning, and moral uplift of working is not a trade-off, but a double gain. It is a true "free lunch," if you will.

Many economists today react to such ideas with reflexive disbelief. They put down optimistic claims by calling them "panaceas," too good to be true. TAANSTAAFL 6 is their slogan; cynicism their preferred posture. However, false pessimism is just as false and damaging as false optimism. A truer slogan is TITSTAAFL: "There Is Too Such a Thing As A Free Lunch." It's rather a question of WIGGI?: "Who Is Going to Get It?". Many dismal alleged trade-offs are just someone's mental blocks that stand athwart the path to abundance, or, worse, ways to control and exploit us. Often, in fact, "we can have it all." Is it too good to be true? Let us itemize the many resolutions of alleged trade-offs and standoffs that George's program will achieve.
6 "There Ain't No Such Thing As A Free Lunch."
Epilogue: how the public demonstrates its preference for resolutions over dismal choices

Preaching hard trade-offs is not popular. Voters see through it as a confession of cluelessness. We hear a lot about voter apathy, but voters have responded positively at various times to candidates with positive resolutions, or apparent ones.

Remember the "Phillips Curve" of the late 1970s? "The public has to grow up and choose," the gurus said with some condescension. It's either inflation or unemployment. Soon the voters came up with a third choice, they retired those unavailing later Keynesians.

Next it was Reagan and Laffer, who said you can have lower tax rates and higher tax revenues, more defense and a lower deficit. Talk about panaceas! This one proved to be a fraud, but the voters loved it until they slowly realized the promise couldn't possibly be delivered.

Now it is the privatizers. They have learned to sell the product by soft-pedaling "trade-offs." Instead, they talk about "win-win" solutions, a new euphemism for trade-offs that camouflages them as resolutions, and hides the sneaky truth that much of the wins come from privatizing public property without compensation. The public will stop falling for it as they finally realize that most of these are really "win-win-lose" solutions, with the public as the loser.

30 years ago, it was "demand-side economics" (as it was later called). It was mostly Keynesian "fiscal policy," with some monetary policy, also demand-sided, as its Tweedledum rival. Keynes became popular because orthodox economists, unavailing, had reduced themselves to posing a hard choice. To escape from depression, they said, you must first suffer dismally: cut wages, consume less. It's like a hangover, you must repent of the good times you had in the roaring twenties. The voters rejected that preaching thumpingly.

Keynes had better news. He said you can have it all: raise wages, consume more, enjoy more public services, and in result find people saving more and working more! People who followed his ideas won elections for years. With all its faults and charlatanism, Keynesian economics was at least optimistic and hopeful. It lasted until his successors fell into the dismal trade-off mode of the Phillips Curve.

Before that it was the New Deal panacea: national planning. Before that, at least in the States under Herbert Hoover, it was business "Associationism": cartels, plus peace pacts, red-baiting, debt retirement, the corporate state, two chickens in every pot and a car in every garage. We know where that led.

Before those panaceas there was Henry George. He, like popular figures after him, was anything but dismal. He, too, said "we can have it all." It made his ideas very popular. We are often told that Georgism never really made it, but that is warped history. It never "took over" lock, stock and barrel, but it won substantial minorities, to whom real concessions were made. His ideas were at their political crest roughly from 1901-20. 14 They were incorporated into The Progressive Movement.

14 They were carried towards the top by such well-known figures as David Lloyd George in England, Alexandr Kerensky in Russia, Sun Yat-sen in China, hundreds of local and state, and a few powerful national politicians in both Canada and the U.S.A., Billy Hughes in Australia, Rolland O'Regan in New Zealand, Chaim Weizmann in Palestine, Francisco Madero in Mexico, and many others around the world. In the States, they were an integral part of the Progressive Movement, which for a time dominated both our major parties. In England, Lloyd George's budget speech of 1909 reads in part as though written by Henry George himself; some of Winston Churchill's speeches were written by Georgist ghosts.

Unlike the other panaceas cited, George's never failed. It would be fairer to say it fell to the loss of young leaders in World War I, and the marathon Red Scare that dominated much of the world from 1919 to 1989. The Red Scare energized property defenders everywhere; by confusion, its victims included Georgism. It made Georgists pull in their horns until their message lost its vigor and excitement: its resolving qualities, which were derided as "panaceas." Now, with the fall of the Soviet Empire, is a good time to pick up where the Progressive Movement was aborted. ... read the whole article

Mason Gaffney: Interview: Is There a Conspiracy in the Teaching of Economics and History within the American Education System?

TPR - Explain exactly what would happen if America began shifting taxes off of everything else and onto land value.

MG - Exactly? The effects are too great, too pervasive to predict exactly.

  • It would unleash massive forces of production, exchange, capital formation, and building, forces now trapped and frustrated in the coils of our complex, counterproductive tax mess.
  • It would enhance the supply of goods and services while simultaneously lowering taxes on the poor and the workers, thus reconciling the needs of both efficiency and equity, in one stroke.
  • It would raise taxes on the richest Americans, and alien landowners, too, without diluting in the least their incentives to work, to create capital, or to hire workers: it would actually fortify those incentives.
  • It would spring people loose to renew large parts of our older cities, and rehab what they do not re place.
  • It would let local school districts support education at much higher levels than now, without fear of driving away business.
  • It would satisfy the demand for housing on land that Nature suited for housing, without invading flood plains, steep slopes, remote deserts, and other places that cost society dearly to serve and rescue.
  • It would raise the demand for labor, taking people off welfare and keeping them out of jails.
One could go on at length, but Henry George summed it up in three words: "Association in Equality." Civilization advances when those conditions are met, and declines when they are denied. America has been denying them; we are all paying the price.  ... read the whole article

Fred E. Foldvary — The Ultimate Tax Reform: Public Revenue from Land Rent

We still need to judge whether it is fair for only landowners to pay the taxes, rather than to spread the burden on all who get income or spend money or have wealth.

Natural-law philosophers such as John Locke have reasoned that all human beings have a natural ownership right to their labor and the products of that labor. The fundamental equality of humanity means it is fundamentally wrong for some to take away the labor done by others.31 That notion is almost universally recognized today with respect to slavery, and some folks are beginning to recognize that the current tax system—which taxes our earnings and taxes how we invest or spend those earnings—also violates man’s natural right to the fruits of his labor.

If taking the fruit of one’s labor is fundamentally unjust, how can a community raise the monies needed to build essential infrastructure and provide public services? Land value taxation takes into account not only the value of the land due to nature, such as soil and climate, but also the great increase in land values that result from population, commerce, security and other civic services, and public works—elements beyond the activity of the property owner. The windfall increase in the rental or land value of the land, contended Henry George and others, is a surplus that can be tapped by the community.32

Those suggesting positive consequences of shifting taxation to rent have been accused of exaggerating its beneficial effects.33 Freedom from punitive taxation is not a panacea, but the infliction of arbitrary costs on enterprise and the skewing of market signals such as prices and profits is indeed a universal and major cause of economic woes. It is not an exaggeration to propose that removing these would have many beneficial results, just as one’s health improves considerably if one stops taking poison. ... read the whole document

Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place

Enthusiastic proponents of Henry George’s ideas have often presented them as a panacea for the economic, social and environmental problems that beset contemporary society. Indeed, the Georgist analysis does have much to offer. By more adequately addressing land as a unique economic, social and ecological resource, it can help to reveal underlying causes of currently pressing issues such as declining housing affordability, growing economic inequality, and environmental decay.

The Georgist land tax ‘remedy’ can also play an important role in the redress of these problems. However, there are limitations to the modern application of George’s ideas, as outlined in this article. While a uniform land tax is a necessary component in addressing contemporary political economic problems, it is not sufficient. It needs to be set in the context of a broader political economic analysis and policy program, also addressing public housing, urban and regional policies, environmental taxes and regulations, ‘floors and ceilings’ to limit income inequalities and macroeconomic stabilisation.

While the Georgist analysis redresses the general neglect of land in modern economic orthodoxy, it is important not to go too far to the other extreme. In other words, the important emphasis on land should not come at the expense of attention to problems associated with labour and capital and to the complex forms of government policy necessary for the balancing of contemporary economic, social and ecological concerns. The Georgist analysis needs to be integrated into a comprehensive political economic analysis of contemporary capitalism.

So what does ‘putting Henry George in his place’ entail? It means recognising the political economic importance of land and the potential social gains from the extension of land taxation. Equally, it means recognising the necessity of relating Georgist ideas and policy prescriptions to a broader canvas of modern political economy, including the analytical traditions associated with Karl Marx, J. M. Keynes, and J. K. Galbraith, and modern environmental economics. Henry George’s place is in good company. read the whole article

 

 

To share this page with a friend: right click, choose "send," and add your comments.

Red links have not been visited; .
Green links are pages you've seen

Essential Documents pertinent to this theme:
Home
Top of page
Essential Documents
Themes
to email this page to a friend: right click, choose "send"
   
Wealth and Want
www.wealthandwant.com
    
... because democracy alone hasn't yet led to a society in which all can prosper