Population
Growth
Natural population increases affect the demand for land. Immigration into
a specific town, county, state, region or country affect the demand for
land. Advances in medical science which reduce mortality, in all age groups,
affect the demand for land.
Increases in the birth rate influence the demand for land.
All these sources
of population growth increase the demand for land, and since land is in fixed
supply, and some sites are more desirable than others, the price of land
rises faster than other factors whose supply can respond to increases in demand.
Henry George pointed out the relationship between the privatization of land
rent and poverty, particularly in the densest cities. (He also told us how
to solve the problem: check out the Remedy.)
Henry George: Political Dangers (Chapter 2 of Social Problems, 1883)
[01] THE American Republic is today unquestionably foremost of the nations — the van leader of modern civilization. Of all the great peoples of the European family, her people are the most homogeneous, the most active and most assimilative. Their average standard of intelligence and comfort is higher; they have most fully adopted modern industrial improvements, and are quickest to utilize discovery and invention; their political institutions are most in accordance with modern ideas, their position exempts them from dangers and difficulties besetting the European nations, and a vast area of unoccupied land gives them room to grow.
[02] At the rate of increase so far maintained, the English-speaking people of America will, by the close of the century, number nearly one hundred million — a population as large as owned the sway of Rome in her palmiest days. By the middle of the next century — a time which children now born will live to see — they will, at the same rate, number more than the present population of Europe; and by its close nearly equal the population which, at the beginning of this century, the whole earth was believed to contain.
[03] But the increase of power is more rapid than the increase of population, and goes on in accelerating progression. Discovery and invention stimulate discovery and invention; and it is only when we consider that the industrial progress of the last fifty years bids fair to pale before the achievements of the next that we can vaguely imagine the future that seems opening before the American people. The center of wealth, of art, of luxury and learning, must pass to this side of the Atlantic even before the center of population. It seems as if this continent had been reserved — shrouded for ages from the rest of the world — as the field upon which European civilization might freely bloom. And for the very reason that our growth is so rapid and our progress so swift; for the very reason that all the tendencies of modern civilization assert themselves here more quickly and strongly than anywhere else, the problems which modern civilization must meet, will here first fully present themselves, and will most imperiously demand to be thought out or fought out.
[04] It is difficult for any one to turn from the history of the past to think of the incomparable greatness promised by the rapid growth of the United States without something of awe — something of that feeling which induced Amasis of Egypt to dissolve his alliance with the successful Polycrates, because "the gods do not permit to mortals such prosperity." Of this, at least, we may be certain: the rapidity of our development brings dangers that can be guarded against only by alert intelligence and earnest patriotism.
[07] Thus the mere growth of society involves danger of the gradual conversion of government into something independent of and beyond the people, and the gradual seizure of its powers by a ruling class — though not necessarily a class marked off by personal titles and a hereditary status, for, as history shows, personal titles and hereditary status do not accompany the concentration of power, but follow it. The same methods which, in a little town where each knows his neighbor and matters of common interest are under the common eye, enable the citizens freely to govern themselves, may, in a great city, as we have in many cases seen, enable an organized ring of plunderers to gain and hold the government. So, too, as we see in Congress, and even in our State legislatures, the growth of the country and the greater number of interests make the proportion of the votes of a representative, of which his constituents know or care to know, less and less. And so, too, the executive and judicial departments tend constantly to pass beyond the scrutiny of the people. ...
read the entire essay
Henry George: Coming Increase of Social Pressure (Chapter 3 of Social Problems, 1883)
[01] THE trees, as I write, have not yet begun to leaf,
nor even the blossoms to appear; yet, passing down the lower part of Broadway
these early days of
spring, one breasts a steady current of uncouthly dressed men and women, carrying
bundles and boxes and all manner of baggage. As the season advances, the human
current will increase; even in winter it will not wholly cease its flow. It
is the great gulf-stream of humanity which sets from Europe upon America —
the greatest migration of peoples since the world began. Other minor branches
has the stream. Into Boston and Philadelphia, into Portland, Quebec and Montreal,
into New Orleans, Galveston, San Francisco and Victoria, come offshoots of
the same current; and as it flows it draws increasing volume from wider sources.
Emigration to America has, since 1848, reduced the population of Ireland by
more than a third; but as Irish ability to feed the stream declines, English
emigration increases; the German outpour becomes so vast as to assume the first
proportions, and the millions of Italy, pressed by want as severe as that of
Ireland, begin to turn to the emigrant ship as did the Irish. In Castle Garden
one may see the garb and hear the speech of all European peoples. From the
fiords of Norway, from the plains of Russia and Hungary, from the mountains
of Wallachia, and from Mediterranean shores and islands, once the center of
classic civilization, the great current is fed. Every year increases the facility
of its flow. Year by year improvements in steam navigation are practically
reducing the distance between the two continents; year by year European railroads
are making it easier for interior populations to reach the seaboard, and the
telegraph, the newspaper, the schoolmaster and the cheap post are lessening
those objections of ignorance and sentiment to removal that are so strong with
people long rooted in one place. Yet, in spite of this great exodus, the population
of Europe, as a whole, is steadily increasing.
[02] And across the continent, from east to west, from the older to the newer
States, an even greater migration is going on. Our people emigrate more readily
than those of Europe, and increasing as European immigration is, it is yet
becoming a less and less important factor of our growth, as compared with the
natural increase of our population. At Chicago and St. Paul, Omaha and Kansas
City, the volume of the westward-moving current has increased, not diminished.
From what, so short a time ago, was the new West of unbroken prairie and native
forest, goes on, as children grow up, a constant migration to a newer West.
[03] This westward expansion of population has gone on steadily since the
first settlement of the Eastern shore. It has been the great distinguishing
feature in the conditions of our people. Without its possibility we would have
been in nothing what we are. Our higher standard of wages and of comfort and
of average intelligence, our superior self-reliance, energy, inventiveness,
adaptability and assimilative power, spring as directly from this possibility
of expansion as does our unprecedented growth. All that we are proud of in
national life and national character comes primarily from our background of
unused land. We are but transplanted Europeans, and, for that matter mostly
of the "inferior classes." It is not usually those whose position
is comfortable and whose prospects are bright who emigrate; it is those who
are pinched and dissatisfied, those to whom no prospect seems open. There are
heralds' colleges in Europe that drive a good business in providing a certain
class of Americans with pedigrees and coats of arms; but it is probably well
for this sort of self-esteem that the majority of us cannot truly trace our
ancestry very far. We had some Pilgrim Fathers, it is true; likewise some Quaker
fathers, and other sorts of fathers; yet the majority even of the early settlers
did not come to America for "freedom to worship God," but because
they were poor, dissatisfied, unsuccessful, or recklessly adventurous — many
because they were evicted, many to escape imprisonment, many because they were
kidnapped, many as self-sold bondsmen, as indentured apprentices, or mercenary
soldiers. It is the virtue of new soil, the freedom of opportunity given by
the possibility of expansion, that has here transmuted into wholesome human
growth material that, had it remained in Europe, might have been degraded and
dangerous, just as in Australia the same conditions have made respected and
self-respecting citizens out of the descendants of convicts, and even out of
convicts themselves.
...
read the entire essay
Henry George: The Common Sense of Taxation (1881
article)
For, keeping in mind the fact that all wealth is the result of human exertion,
it is clearly seen that, having in view the promotion of the general prosperity,
it is the height of absurdity to tax wealth for purposes of revenue while
there remains, unexhausted by taxation, any value attaching to land. We
may tax land values as much as we please, without in the slightest degree
lessening the amount of land, or the capabilities of land, or the inducement
to use land. But we cannot tax wealth without lessening the inducement
to the production of wealth, and decreasing the amount of wealth. We might
take the whole value of land in taxation, so as to make the ownership of
land worth nothing, and the land would still remain, and be as useful as
before. The effect would be to throw land open to users free of
price, and thus to increase its capabilities, which are brought out by
increased
population. But impose anything like such taxation upon wealth, and the
inducement to the production of wealth would be gone. Movable wealth would
be hidden or carried off, immovable wealth would be suffered to go to decay,
and where was prosperity would soon be the silence of desolation. ...
Or, take the case of the railroads. That railroads are a public benefit
no one will dispute. We want more railroads, and want them to reduce their
fares and freight. Why then should we tax them? for taxes upon railroads
deter from railroad building, and compel higher charges. Instead of taxing
the railroads, is it not clear that we should rather tax the increased
value which they give to land? To tax railroads is to check railroad building,
to reduce profits, and compel higher rates; to tax the value they give
to
land is to increase railroad business and permit lower rates. The elevated
railroads, for instance, have opened to the overcrowded population of New
York the wide, vacant spaces of the upper part of the island. But this
great public benefit is neutralized by the rise in land values. Because these
vacant
lots can be reached more cheaply and quickly, their owners demand more
for them, and so the public gain in one way is offset in another, while the
roads
lose the business they would get were not building checked by the high
prices demanded for lots. The increase of land values, which the elevated
roads
have caused, is not merely no advantage to them — it is an injury;
and it is clearly a public injury. The elevated railroads ought not to
be taxed. The more profit they make, with the better conscience can they
be
asked to still further reduce fares. It is the increased land values which
they have created that ought to be taxed, for taxing them will give the
public the full benefit of cheap fares.
So with railroads everywhere. And so not alone with railroads, but with
all industrial enterprises. So long as we consider that community most prosperous
which increases most rapidly in wealth, so long is it the height of absurdity
for us to tax wealth in any of its beneficial forms. We should tax what we
want to repress, not what we want to encourage. We should tax that
which results from the general prosperity, not that which conduces to it.
It is
the increase of population, the extension of cultivation, the manufacture
of goods, the building of houses and ships and railroads, the accumulation
of capital, and the growth of commerce that add to the value of land — not
the increase in the value of land that induces the increase of population
and increase of wealth. It is not that the land of Manhattan Island is now
worth hundreds of millions where, in the time of the early Dutch settlers,
it was only worth dollars, that there are on it now so many more people,
and so much more wealth. It is because of the increase of population and
the increase of wealth that the value of the land has so much increased.
Increase of land values tends of itself to repel population and prevent improvement.
And thus the taxation of land values, unlike taxation of other property,
does not tend to prevent the increase of wealth, but rather to stimulate
it. It is the taking of the golden egg, not the choking of the goose that
lays it.
Every consideration of policy and ethics squares with this conclusion. The
tax upon land values is the most economically perfect of all taxes. It does
not raise prices; it maybe collected at least cost, and with the utmost ease
and certainty; it leaves in full strength all the springs of production;
and, above all, it consorts with the truest equality and the highest justice.
For, to take for the common purposes of the community that value which results
from the growth of the community, and to free industry and enterprise and
thrift from burden and restraint, is to leave to each that which he fairly
earns, and to assert the first and most comprehensive of equal rights — the
equal right of all to the land on which, and from which, all must live.
Thus it is that the scheme of taxation which conduces to the greatest production
is also that which conduces to the fairest distribution, and that in the
proper adjustment of taxation lies not merely the possibility of enormously
increasing the general wealth, but the solution of these pressing social
and political problems which spring from unnatural inequality in the distribution
of wealth. ... read the whole article
Henry George: Thy Kingdom Come
(1889 speech)
One cannot look, it seems to
me, through nature — whether
one looks at the stars through a telescope, or have the microscope
reveal to one those worlds that we find in drops of water. Whether
one considers the human frame, the adjustments of the animal kingdom,
or any department of physical nature, one must see that there has
been a contriver and adjuster, that there has been an intent. So
strong is that feeling, so natural is it to our minds, that even
people who deny the Creative Intelligence are forced, in spite of
themselves, to talk of intent; the claws on one animal were intended,
we say, to climb with, the fins of another to propel it through the
water.
Yet, while in looking through the
laws of physical nature, we
find intelligence we do not so clearly find beneficence. But in the
great social fact that as
population increases, and improvements are
made, and men progress in civilisation, the one thing that rises
everywhere in value is land, and in this we may see a proof of the
beneficence of the Creator.
Why, consider what it means! It
means that the social laws are
adapted to progressive humanity! In a rude state of society where
there is no need for common expenditure, there is no value attaching
to land. The only value which attaches there is to things produced by
labour. But as civilisation goes on, as a division of labour takes
place, as people come into centres, so do the common wants increase,
and so does the necessity for public revenue arise. And so in that
value which attaches to land, not by reason of anything the
individual does, but by reason of the growth of the community, is a
provision intended — we may safely say intended — to meet
that social want.
Just as society grows, so do the
common needs grow, and so grows
this value attaching to land — the provided fund from which they
can be supplied. Here is a value that may be taken, without impairing
the right of property, without taking anything from the producer,
without lessening the natural rewards of industry and thrift. Nay,
here is a value that must be taken if we would prevent the most
monstrous of all monopolies. What does all this mean? It means that
in the creative plan, the natural advance in civilisation is an
advance to a greater and greater equality instead of to a more and
more monstrous inequality.... Read the whole speech
Henry George: The Savannah (excerpt
from Progress & Poverty, Book IV: Chapter 2: The Effect of Increase
of Population
upon the Distribution of Wealth; also found in Significant
Paragraphs from Progress & Poverty, Chapter 3: Land Rent Grows as Community
Develops)
Here, let us imagine, is an unbounded savannah, stretching off in
unbroken sameness of grass and flower, tree and rill, till the traveler tires
of the monotony. Along comes the wagon of the first immigrant. Where to settle
he cannot tell — every acre seems as good as every other acre. As to
wood, as to water, as to fertility, as to situation, there is absolutely
no choice, and he is perplexed by the embarrassment of richness. Tired out
with the search for one place that is better than another, he stops — somewhere,
anywhere — and starts to make himself a home. The soil is virgin and
rich, game is abundant, the streams flash with the finest trout. Nature is
at her very best. He has what, were he in a populous district, would make
him rich; but he is very poor. To say nothing of the mental craving, which
would lead him to welcome the sorriest stranger, he labors under all the
material disadvantages of solitude. He can get no temporary assistance for
any work that requires a greater union of strength than that afforded by
his own family, or by such help as he can permanently keep. Though he has
cattle, he cannot often have fresh meat, for to get a beefsteak he must kill
a bullock. He must be his own blacksmith, wagonmaker, carpenter, and cobbler — in
short, a "jack of all trades and master of none." He cannot have his children
schooled, for, to do so, he must himself pay and maintain a teacher. Such
things as he cannot produce himself, he must buy in quantities and keep on
hand, or else go without, for he cannot be constantly leaving his work and
making a long journey to the verge of civilization; and when forced to do
so, the getting of a vial of medicine or the replacement of a broken auger
may cost him the labor of himself and horses for days. Under such circumstances,
though nature is prolific, the man is poor. It is an easy matter for him
to get enough to eat; but beyond this, his labor will suffice to satisfy
only the simplest wants in the rudest way.
Soon there comes another immigrant. Although every quarter section* of the
boundless plain is as good as every other quarter section, he is not beset
by any embarrassment as to where to settle. Though the land is the same,
there is one place that is clearly better for him than any other place, and
that is where there is already a settler and he may have a neighbor. He settles
by the side of the first comer, whose condition is at once greatly improved,
and to whom many things are now possible that were before impossible, for
two men may help each other to do things that one man could never do.
*The public prairie lands of
the United States were surveyed into sections of one mile square, and a
quarter section (160 acres) was the usual government allotment to a settler
under the Homestead Act.
Another immigrant comes, and, guided by the same attraction, settles where
there are already two. Another, and another, until around our first comer there
are a score of neighbors. Labor has now an effectiveness which, in the solitary
state, it could not approach. If heavy work is to be done, the settlers have
a logrolling, and together accomplish in a day what singly would require years.
When one kills a bullock, the others take part of it, returning when they kill,
and thus they have fresh meat all the time. Together they hire a schoolmaster,
and the children of each are taught for a fractional part of what similar teaching
would have cost the first settler. It becomes a comparatively easy matter to
send to the nearest town, for some one is always going. But there is less need
for such journeys. A blacksmith and a wheelwright soon set up shops, and our
settler can have his tools repaired for a small part of the labor it formerly
cost him. A store is opened and he can get what he wants as he wants it; a
postoffice, soon added, gives him regular communication with the rest of the
world. Then come a cobbler, a carpenter, a harness maker, a doctor; and a little
church soon arises. Satisfactions become possible that in the solitary state
were impossible. There are gratifications for the social and the intellectual
nature — for that part of the man that rises above the animal. The power
of sympathy, the sense of companionship, the emulation of comparison and contrast,
open a wider, and fuller, and more varied life. In rejoicing, there are others
to rejoice; in sorrow, the mourners do not mourn alone. There are husking bees,
and apple parings, and quilting parties. Though the ballroom be unplastered
and the orchestra but a fiddle, the notes of the magician are yet in the strain,
and Cupid dances with the dancers. At the wedding, there are others to admire
and enjoy; in the house of death, there are watchers; by the open grave, stands
human sympathy to sustain the mourners. Occasionally, comes a straggling lecturer
to open up glimpses of the world of science, of literature, or of art; in election
times, come stump speakers, and the citizen rises to a sense of dignity and
power, as the cause of empires is tried before him in the struggle of John
Doe and Richard Roe for his support and vote. And, by and by, comes the circus,
talked of months before, and opening to children whose horizon has been the
prairie, all the realms of the imagination — princes and princesses of
fairy tale, mailclad crusaders and turbaned Moors, Cinderella's fairy coach,
and the giants of nursery lore; lions such as crouched before Daniel, or in
circling Roman amphitheater tore the saints of God; ostriches who recall the
sandy deserts; camels such as stood around when the wicked brethren raised
Joseph from the well and sold him into bondage; elephants such as crossed the
Alps with Hannibal, or felt the sword of the Maccabees; and glorious music
that thrills and builds in the chambers of the mind as rose the sunny dome
of Kubla Khan.
Go to our settler now, and say to him: "You have so many fruit trees which
you planted; so much fencing, such a well, a barn, a house — in short,
you have by your labor added so much value to this farm. Your land itself
is not quite so good. You have been cropping it, and by and by it will
need manure. I will give you the full value of all your improvements if
you will give it to me, and go again with your family beyond the verge
of settlement." He would laugh at you. His land yields no more wheat or
potatoes than before, but it does yield far more of all the necessaries
and comforts of life. His labor upon it will bring no heavier crops, and,
we will suppose, no more valuable crops, but it will bring far more of
all the other things for which men work. The presence of other settlers — the
increase of population — has added to the productiveness, in these
things, of labor bestowed upon it, and this added productiveness gives
it a superiority over land of equal natural quality where there are as
yet no settlers. If no land remains to be taken up, except such as is as
far removed from population as was our settler's land when he first went
upon it, the value or rent of this land will be measured by the whole of
this added capability. If, however, as we have supposed, there is a continuous
stretch of equal land, over which population is now spreading, it will
not be necessary for the new settler to go into the wilderness, as did
the first. He will settle just beyond the other settlers, and will get
the advantage of proximity to them. The value or rent of our settler's
land will thus depend on the advantage which it has, from being at the
center of population, over that on the verge. In the one case, the margin
of production will remain as before; in the other, the margin of production
will be raised.
Population still continues to increase, and as it increases so do the
economies which its increase permits, and which in effect add to the productiveness
of the land. Our first settler's land, being the center of population,
the store, the blacksmith's forge, the wheelwright's shop, are set up on
it, or on its margin, where soon arises a village, which rapidly grows
into a town, the center of exchanges for the people of the whole district.
With no greater agricultural productiveness than it had at first, this
land now begins to develop a productiveness of a higher kind. To labor
expended in raising corn, or wheat, or potatoes, it will yield no more
of those things than at first; but to labor expended in the subdivided
branches of production which require proximity to other producers, and,
especially, to labor expended in that final part of production, which consists
in distribution, it will yield much larger returns. The wheatgrower may
go further on, and find land on which his labor will produce as much wheat,
and nearly as much wealth; but the artisan, the manufacturer, the storekeeper,
the professional man, find that their labor expended here, at the center
of exchanges, will yield them much more than if expended even at a little
distance away from it; and this excess of productiveness for such purposes
the landowner can claim just as he could an excess in its wheat-producing
power. And so our settler is able to sell in building lots a few of his
acres for prices which it would not bring for wheatgrowing if its fertility
had been multiplied many times. With the proceeds, he builds himself a
fine house, and furnishes it handsomely. That is to say, to reduce the
transaction to its lowest terms, the people who wish to use the land build
and furnish the house for him, on condition that he will let them avail
themselves of the superior productiveness which the increase of population
has given the land.
Population still keeps on increasing, giving greater and greater utility
to the land, and more and more wealth to its owner. The town has grown
into a city — a St. Louis, a Chicago or a San Francisco — and
still it grows. Production is here carried on upon a great scale, with
the best machinery and the most favorable facilities; the division of labor
becomes extremely minute, wonderfully multiplying efficiency; exchanges
are of such volume and rapidity that they are made with the minimum of
friction and loss. Here is the heart, the brain, of the vast social organism
that has grown up from the germ of the first settlement; here has developed
one of the great ganglia of the human world. Hither run all roads, hither
set all currents, through all the vast regions round about. Here, if you
have anything to sell, is the market; here, if you have anything to buy,
is the largest and the choicest stock. Here intellectual activity is gathered
into a focus, and here springs that stimulus which is born of the collision
of mind with mind. Here are the great libraries, the storehouses and granaries
of knowledge, the learned professors, the famous specialists. Here are
museums and art galleries, collections of philosophical apparatus, and
all things rare, and valuable, and best of their kind. Here come great
actors, and orators, and singers, from all over the world. Here, in short,
is a center of human life, in all its varied manifestations.
So enormous are the advantages which this land now offers for the application
of labor, that instead of one man — with a span of horses scratching
over acres, you may count in places thousands of workers to the acre, working
tier on tier, on floors raised one above the other, five, six, seven and
eight stories from the ground, while underneath the surface of the earth
engines are throbbing with pulsations that exert the force of thousands
of horses.
All these advantages attach to the land; it is on this land and no
other that they can be utilized, for here is the center of population — the
focus of exchanges, the market place and workshop of the highest forms
of industry. The productive powers which density of population has
attached to this land are equivalent to the multiplication of its original
fertility by the hundredfold and the thousandfold. And rent, which measures
the difference between this added productiveness and that of the least
productive land in use, has increased accordingly. Our settler, or whoever
has succeeded to his right to the land, is now a millionaire. Like another Rip
Van Winkle, he may have lain down and slept; still he is rich — not
from anything he has done, but from the increase of population. There
are lots from which for every foot of frontage the owner may draw more
than an average mechanic can earn; there are lots that will sell for
more than would suffice to pave them with gold coin. In the principal
streets are towering buildings, of granite, marble, iron, and plate glass,
finished in the most expensive style, replete with every convenience.
Yet they are not worth as much as the land upon which they rest — the
same land, in nothing changed, which when our first settler came upon
it had no value at all.
That this is the way in which the increase of population powerfully acts
in increasing rent, whoever, in a progressive country, will look around
him, may see for himself. The process is going on under his eyes. The increasing
difference in the productiveness of the land in use, which causes an increasing
rise in rent, results not so much from the necessities of increased population
compelling the resort to inferior land, as from the increased productiveness
which increased population gives to the lands already in use. The most
valuable lands on the globe, the lands which yield the highest rent, are
not lands of surpassing natural fertility, but lands to which a surpassing
utility has been given by the increase of population.
The increase of productiveness or utility which increase of population
gives to certain lands, in the way to which I have been calling attention,
attaches, as it were, to the mere quality of extension. The valuable quality
of land that has become a center of population is its superficial capacity — it
makes no difference whether it is fertile, alluvial soil like that of Philadelphia,
rich bottom land like that of New Orleans; a filled-in marsh like that
of St. Petersburg, or a sandy waste like the greater part of San Francisco.
And where value seems to arise from superior natural qualities, such
as deep water and good anchorage, rich deposits of coal and iron, or
heavy timber, observation also shows that these superior qualities are
brought out, rendered tangible, by population. The coal and iron
fields of Pennsylvania, that today [1879] are worth enormous sums, were
fifty years ago valueless. What is the efficient cause of the difference?
Simply the difference in population. The coal and iron beds of Wyoming
and Montana, which today are valueless, will, in fifty years from now,
be worth millions on millions, simply because, in the meantime, population
will have greatly increased.
It is a well-provisioned ship, this on which we sail through space. If
the bread and beef above decks seem to grow scarce, we but open a hatch
and there is a new supply, of which before we never dreamed. And
very great command over the services of others comes to those who as the
hatches are opened are permitted to say, "This is mine!" ... read
the whole chapter of Significant Paragraphs
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894)
b. Normal Effect of Social Progress upon Wages and Rent
In the foregoing charts the effect of social growth is ignored, it being
assumed that the given expenditure of labor force does not become more productive.93
Let us now try to illustrate that effect, upon the supposition that social
growth increases the productive power of the given expenditure of labor force
as applied to the first closed space, to 100; as applied to the second, to
50; as applied to the third, to 10; as applied to the fourth, to 3, and as
applied to the open space, to 1. 94 If there were no increased demand for
land the chart would then be like this: [chart]
93. "The effect of increasing population upon the
distribution of wealth is to increase rent .. . in two ways: First, By
lowering the margin of cultivation. Second, By bringing out in land special
capabilities otherwise latent, and by attaching special capabilities
to particular lands.
"I am disposed to think that the latter mode, to
which little attention has been given by political economists, is really
the more important." — Progress and Poverty, book iv, ch.
iii.
"When we have inquired what it is that marks off
land from those material things which we regard as products of the land,
we shall find that the fundamental attribute of land is its extension.
The right to use a piece of land gives command over a certain space — a
certain part of the earth's surface. The area of the earth is fixed;
the geometric relations in which any particular part of it stands to
other parts are fixed. Man has no control over them; they are wholly
unaffected by demand; they have no cost of production; there is no supply
price at which they can be produced.
"The use of a certain area of the earth's surface
is a primary condition of anything that man can do; it gives him room
for his own actions, with the enjoyment of the heat and the light, the
air and the rain which nature assigns to that area; and it determines
his distance from, and in great measure his relations to, other things
and other persons. We shall find that it is this property of land, which,
though as yet insufficient prominence has been given to it, is the ultimate
cause of the distinction which all writers are compelled to make between
land and other things." — Marshall's Prin., book iv, ch. ii,
sec. i.
94. Of course social growth does not go on in this regular
way; the charts are merely illustrative. They are intended to illustrate
the universal fact that as any land becomes a center of trade or other
social relationship its value rises.
Though Rent is now increased, so are Wages. Both benefit by social growth.
But if we consider the fact that increase in the productive power of labor
increases demand for land we shall see that the tendency of Wages (as a proportion
of product if not as an absolute quantity) is downward, while that of Rent
is upward. 95 And this conclusion is confirmed by observation. 96
95. "Perhaps it may be well to remind the reader,
before closing this chapter, of what has been before stated — that
I am using the word wages not in the sense of a quantity, but in the
sense of a proportion. When I say that wages fall as rent rises, I do
not mean that the quantity of wealth obtained by laborers as wages is
necessarily less, but that the proportion which it bears to the whole
produce is necessarily less. The proportion may diminish while the quantity
remains the same or increases." — Progress and Poverty, book
iii, ch. vi.
96. The condition illustrated in the last chart would
be the result of social growth if all land but that which was in full
use were common land. The discovery of mines, the development of cities
and towns, and the construction of railroads, the irrigation of and places,
improvements in government, all the infinite conveniences and laborsaving
devices that civilization generates, would tend to abolish poverty by
increasing the compensation of labor, and making it impossible for any
man to be in involuntary idleness, or underpaid, so long as mankind was
in want. If demand for land increased, Wages would tend to fall as the
demand brought lower grades of land into use; but they would at the same
time tend to rise as social growth added new capabilities to the lower
grades. And it is altogether probable that, while progress would lower
Wages as a proportion of total product, it would increase them as an
absolute quantity.
b. Normal Effect of Social Progress upon Wages and Rent
In the foregoing charts the effect of social growth is ignored, it being
assumed that the given expenditure of labor force does not become more productive.93
Let us now try to illustrate that effect, upon the supposition that social
growth increases the productive power of the given expenditure of labor force
as applied to the first closed space, to 100; as applied to the second, to
50; as applied to the third, to 10; as applied to the fourth, to 3, and as
applied to the open space, to 1. 94 If there were no increased demand for
land the chart would then be like this: [chart]
93. "The effect of increasing population upon the
distribution of wealth is to increase rent .. . in two ways: First, By
lowering the margin of cultivation. Second, By bringing out in land special
capabilities otherwise latent, and by attaching special capabilities
to particular lands.
"I am disposed to think that the latter mode, to
which little attention has been given by political economists, is really
the more important." — Progress and Poverty, book iv, ch.
iii.
"When we have inquired what it is that marks off
land from those material things which we regard as products of the land,
we shall find that the fundamental attribute of land is its extension.
The right to use a piece of land gives command over a certain space — a
certain part of the earth's surface. The area of the earth is fixed;
the geometric relations in which any particular part of it stands to
other parts are fixed. Man has no control over them; they are wholly
unaffected by demand; they have no cost of production; there is no supply
price at which they can be produced.
"The use of a certain area of the earth's surface
is a primary condition of anything that man can do; it gives him room
for his own actions, with the enjoyment of the heat and the light, the
air and the rain which nature assigns to that area; and it determines
his distance from, and in great measure his relations to, other things
and other persons. We shall find that it is this property of land, which,
though as yet insufficient prominence has been given to it, is the ultimate
cause of the distinction which all writers are compelled to make between
land and other things." — Marshall's Prin., book iv, ch. ii,
sec. i.
94. Of course social growth does not go on in this regular
way; the charts are merely illustrative. They are intended to illustrate
the universal fact that as any land becomes a center of trade or other
social relationship its value rises.
Though Rent is now increased, so are Wages. Both benefit by social growth.
But if we consider the fact that increase in the productive power of labor
increases demand for land we shall see that the tendency of Wages (as a proportion
of product if not as an absolute quantity) is downward, while that of Rent
is upward. 95 And this conclusion is confirmed by observation. 96
95. "Perhaps it may be well to remind the reader,
before closing this chapter, of what has been before stated — that
I am using the word wages not in the sense of a quantity, but in the
sense of a proportion. When I say that wages fall as rent rises, I do
not mean that the quantity of wealth obtained by laborers as wages is
necessarily less, but that the proportion which it bears to the whole
produce is necessarily less. The proportion may diminish while the quantity
remains the same or increases." — Progress and Poverty, book
iii, ch. vi.
96. The condition illustrated in the last chart would
be the result of social growth if all land but that which was in full
use were common land. The discovery of mines, the development of cities
and towns, and the construction of railroads, the irrigation of and places,
improvements in government, all the infinite conveniences and laborsaving
devices that civilization generates, would tend to abolish poverty by
increasing the compensation of labor, and making it impossible for any
man to be in involuntary idleness, or underpaid, so long as mankind was
in want. If demand for land increased, Wages would tend to fall as the
demand brought lower grades of land into use; but they would at the same
time tend to rise as social growth added new capabilities to the lower
grades. And it is altogether probable that, while progress would lower
Wages as a proportion of total product, it would increase them as an
absolute quantity.... read the book
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894) — Appendix:
FAQ
Q6. If a land-owner builds, does not that increase the value of his
land and consequently the amount of the tax he would have to pay? If so,
would not he be taxed for his improvement?
A. No. Upon the value of the building he would never pay any tax. It
is true that his improvement might attract others to the locality in such
numbers
as to make land there scarcer and consequently dearer. His own lot would
in that case rise in value with the other land and be taxed more, just as
the rest would be. But that would not take any of his labor in taxes; he
would still have his building free of taxation. Thus: If on a lot worth $1000
a building worth $1000 were erected, making the whole worth $2000, the tax
would fall only upon the $1000 which represents the value of the lot. If
land then became so scarce that the lot rose in value to $1500 the tax would
be raised. But the owner's improvement would be still exempt. When his property
was worth $2000 he was taxed on $1000, the value of the lot, leaving $1000,
the value of the building, free; and now, though he is taxed on $1500, the
value of the lot, $1000, the value of the building, is still free.
Q42. Does not the growth of a community increase the value of other
things as well as of land? For example, does it not add to the value of
the services of professional men, or of any other business that is dependent
upon the presence and growth of the community, as truly as it does to the
value of land?
A. Granted that the growth of a community primarily tends to increase profits,
the increased profits tend in turn to attract men there to share them. This intensifies
competition and tends to lower profits. At the same time it increases demand
for land and tends to enhance the value of that. It therefore cannot be said
that the growth of a community finally increases the value of other things as
well as of land. In fact it does not. Appropriate houses in cities are no dearer
than appropriate houses in the country, differences in cost of production being
allowed for. And although some professional men get very high wages in thickly
populated cities, the average comfort of professional men in cities is no higher
than in the country, if as high. Moreover, even if labor values as well as land
values were increased by communal growth, it must never be forgotten that labor
values must always be worked for by the individual, whereas land values are never
worked for by the individual. A lawyer may command enormous fees, but he gets
no fee at all unless he works for it; but when land commands enormous rent the
owner gets it without doing the slightest work. ... read
the book
Charles B. Fillebrown: A Catechism
of Natural Taxation, from Principles of
Natural Taxation (1917)
Q17. You would not say that land is a product of industry?
A. No; but the annual site value of land is a product of the growth and industry
of the community.
... read the whole article
Henry George: The Condition of
Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
Nor do we hesitate to say that this way of securing the equal right to the
bounty of the Creator and the exclusive right to the products of labor is
the way intended by God for raising public revenues. For we are not atheists,
who deny God; nor semi-atheists, who deny that he has any concern in politics
and legislation.
It is true as you say — a salutary truth too often forgotten — that “man
is older than the state, and he holds the right of providing for the life
of his body prior to the formation of any state.” Yet, as you too perceive,
it is also true that the state is in the divinely appointed order. For He
who foresaw all things and provided for all things, foresaw and provided
that with the increase of population and the development of industry the
organization of human society into states or governments would become both
expedient and necessary.
No sooner does the state arise than, as we all know, it needs revenues.
This need for revenues is small at first, while population is sparse, industry
rude and the functions of the state few and simple. But with growth
of population and advance of civilization the functions of the state increase and larger
and larger revenues are needed.
Now, He that made the world and placed man in it, He that pre-ordained civilization
as the means whereby man might rise to higher powers and become more and
more conscious of the works of his Creator, must have foreseen this increasing
need for state revenues and have made provision for it. That is to say: The
increasing need for public revenues with social advance, being a natural,
God-ordained need, there must be a right way of raising them — some
way that we can truly say is the way intended by God. It is clear that this
right way of raising public revenues must accord with the moral law.
Hence:
It must not take from individuals what rightfully belongs to individuals.
It must not give some an advantage over others, as by increasing the prices
of what some have to sell and others must buy.
It must not lead men into temptation, by requiring trivial oaths, by making
it profitable to lie, to swear falsely, to bribe or to take bribes.
It must not confuse the distinctions of right and wrong, and weaken the
sanctions of religion and the state by creating crimes that are not sins,
and punishing men for doing what in itself they have an undoubted right to
do.
It must not repress industry. It must not check commerce. It must not punish
thrift. It must offer no impediment to the largest production and the fairest
division of wealth.
Let me ask your Holiness to consider the taxes on the processes and products
of industry by which through the civilized world public revenues are collected — the
octroi duties that surround Italian cities with barriers; the monstrous customs
duties that hamper intercourse between so-called Christian states; the taxes
on occupations, on earnings, on investments, on the building of houses, on
the cultivation of fields, on industry and thrift in all forms. Can these
be the ways God has intended that governments should raise the means they
need? Have any of them the characteristics indispensable in any plan we can
deem a right one?
All these taxes violate the moral law. They take by force what belongs to
the individual alone; they give to the unscrupulous an advantage over the
scrupulous; they have the effect, nay are largely intended, to increase the
price of what some have to sell and others must buy; they corrupt government;
they make oaths a mockery; they shackle commerce; they fine industry and
thrift; they lessen the wealth that men might enjoy, and enrich some by impoverishing
others.
Yet what most strikingly shows how opposed to Christianity is this system
of raising public revenues is its influence on thought.
Christianity teaches us that all men are brethren; that their true interests
are harmonious, not antagonistic. It gives us, as the golden rule of life,
that we should do to others as we would have others do to us. But out of
the system of taxing the products and processes of labor, and out of its
effects in increasing the price of what some have to sell and others must
buy, has grown the theory of “protection,” which denies this
gospel, which holds Christ ignorant of political economy and proclaims laws
of national well-being utterly at variance with his teaching. This theory
sanctifies national hatreds; it inculcates a universal war of hostile tariffs;
it teaches peoples that their prosperity lies in imposing on the productions
of other peoples restrictions they do not wish imposed on their own; and
instead of the Christian doctrine of man’s brotherhood it makes injury
of foreigners a civic virtue.
“By their fruits ye shall know them.” Can anything more clearly
show that to tax the products and processes of industry is not the way God
intended public revenues to be raised?
But to consider what we propose — the raising of public revenues by
a single tax on the value of land irrespective of improvements — is
to see that in all respects this does conform to the moral law.
Let me ask your Holiness to keep in mind that the value we propose to tax,
the value of land irrespective of improvements, does not come from any exertion
of labor or investment of capital on or in it — the values produced
in this way being values of improvement which we would exempt. The value
of land irrespective of improvement is the value that attaches to land by
reason of increasing population and social progress. This is a value that
always goes to the owner as owner, and never does and never can go to the
user; for if the user be a different person from the owner he must always
pay the owner for it in rent or in purchase-money; while if the user be also
the owner, it is as owner, not as user, that he receives it, and by selling
or renting the land he can, as owner, continue to receive it after he ceases
to be a user.
Thus, taxes on land irrespective of improvement cannot lessen the rewards
of industry, nor add to prices,* nor in any way take from the individual
what belongs to the individual. They can take only the value that attaches
to land by the growth of the community, and which therefore belongs to the
community as a whole.
* As to this point it may be well to add that all economists
are agreed that taxes on land values irrespective of improvement or use — or
what in the terminology of political economy is styled rent, a term distinguished
from the ordinary use of the word rent by being applied solely to payments
for the use of land itself — must be paid by the owner and cannot
be shifted by him on the user. To explain in another way the reason given
in the text: Price is not determined by the will of the seller or the
will of the buyer, but by the equation of demand and supply, and therefore
as to things constantly demanded and constantly produced rests at a point
determined by the cost of production — whatever tends to increase
the cost of bringing fresh quantities of such articles to the consumer
increasing price by checking supply, and whatever tends to reduce such
cost decreasing price by increasing supply. Thus taxes on wheat or tobacco
or cloth add to the price that the consumer must pay, and thus the cheapening
in the cost of producing steel which improved processes have made in
recent years has greatly reduced the price of steel. But land has no
cost of production, since it is created by God, not produced by man.
Its price therefore is fixed —
1 (monopoly rent), where land is held in close monopoly,
by what the owners can extract from the users under penalty of deprivation
and consequently of starvation, and amounts to all that common labor
can earn on it beyond what is necessary to life;
2 (economic rent proper), where there is no special monopoly, by what
the particular land will yield to common labor over and above what may
be had by like expenditure and exertion on land having no special advantage
and for which no rent is paid; and,
3 (speculative rent, which is a species of monopoly rent, telling particularly
in selling price), by the expectation of future increase of value from
social growth and improvement, which expectation causing landowners to
withhold land at present prices has the same effect as combination.
Taxes on land values or economic rent can therefore never
be shifted by the landowner to the land-user, since they in no wise increase
the demand for land or enable landowners to check supply by withholding
land from use. Where rent depends on mere monopolization, a case I mention
because rent may in this way be demanded for the use of land even before
economic or natural rent arises, the taking by taxation of what the landowners
were able to extort from labor could not enable them to extort any more,
since laborers, if not left enough to live on, will die. So, in the case
of economic rent proper, to take from the landowners the premiums they
receive, would in no way increase the superiority of their land and the
demand for it. While, so far as price is affected by speculative rent,
to compel the landowners to pay taxes on the value of land whether they
were getting any income from it or not, would make it more difficult
for them to withhold land from use; and to tax the full value would not
merely destroy the power but the desire to do so.
To take land values for the state, abolishing all taxes on the products
of labor, would therefore leave to the laborer the full produce of labor;
to the individual all that rightfully belongs to the individual. It would
impose no burden on industry, no check on commerce, no punishment on thrift;
it would secure the largest production and the fairest distribution of wealth,
by leaving men free to produce and to exchange as they please, without any
artificial enhancement of prices; and by taking for public purposes a value
that cannot be carried off, that cannot be hidden, that of all values is
most easily ascertained and most certainly and cheaply collected, it would
enormously lessen the number of officials, dispense with oaths, do away with
temptations to bribery and evasion, and abolish man-made crimes in themselves
innocent.
But, further: That God has intended the state to obtain the revenues it
needs by the taxation of land values is shown by the same order and degree
of evidence that shows that God has intended the milk of the mother for the
nourishment of the babe.
See how close is the analogy. In that primitive condition ere the need for
the state arises there are no land values. The products of labor have value,
but in the sparsity of population no value as yet attaches to land itself.
But as increasing density of population and increasing elaboration of industry
necessitate the organization of the state, with its need for revenues, value
begins to attach to land. As population still increases and industry grows
more elaborate, so the needs for public revenues increase. And at the same
time and from the same causes land values increase. The connection is invariable.
The value of things produced by labor tends to decline with social development,
since the larger scale of production and the improvement of processes tend
steadily to reduce their cost. But the value of land on which population
centers goes up and up. Take Rome or Paris or London or New York or Melbourne.
Consider the enormous value of land in such cities as compared with the value
of land in sparsely settled parts of the same countries. To what is this
due? Is it not due to the density and activity of the populations
of those cities — to the very causes that require great public expenditure for
streets, drains, public buildings, and all the many things needed for the
health, convenience and safety of such great cities? See how with the growth
of such cities the one thing that steadily increases in value is land; how
the opening of roads, the building of railways, the making of any public
improvement, adds to the value of land. Is it not clear that here is a natural
law — that is to say a tendency willed by the Creator? Can it mean
anything else than that He who ordained the state with its needs has in the
values which attach to land provided the means to meet those needs?
That it does mean this and nothing else is confirmed if we look deeper still,
and inquire not merely as to the intent, but as to the purpose of the intent.
If we do so we may see in this natural law by which land values increase
with the growth of society not only such a perfectly adapted provision for
the needs of society as gratifies our intellectual perceptions by showing
us the wisdom of the Creator, but a purpose with regard to the individual
that gratifies our moral perceptions by opening to us a glimpse of his beneficence.
Consider: Here is a natural law by which as society advances the one thing
that increases in value is land — a natural law by virtue of which
all growth of population, all advance of the arts, all general
improvements of whatever kind, add to a fund that both the commands of justice
and the
dictates of expediency prompt us to take for the common uses of society.
Now, since increase in the fund available for the common uses of society
is increase in the gain that goes equally to each member of society, is it
not clear that the law by which land values increase with social advance
while the value of the products of labor does not increase, tends with the
advance of civilization to make the share that goes equally to each member
of society more and more important as compared with what goes to him from
his individual earnings, and thus to make the advance of civilization lessen
relatively the differences that in a ruder social state must exist between
the strong and the weak, the fortunate and the unfortunate? Does it not show
the purpose of the Creator to be that the advance of man in civilization
should be an advance not merely to larger powers but to a greater and greater
equality, instead of what we, by our ignoring of his intent, are making it,
an advance toward a more and more monstrous inequality? ...
That the value attaching to land with social growth is intended for social
needs is shown by the final proof. God is indeed a jealous God in the sense
that nothing but injury and disaster can attend the effort of men to do
things other than in the way he has intended; in the sense that where the
blessings he proffers to men are refused or misused they turn to evils
that scourge us. And just as for the mother to withhold the provision that
fills her breast with the birth of the child is to endanger physical health,
so for society to refuse to take for social uses the provision intended
for them is to breed social disease.
For refusal to take for public purposes the increasing values that attach
to land with social growth is to necessitate the getting of public revenues
by taxes that lessen production, distort distribution and corrupt society.
It is to leave some to take what justly belongs to all; it is to forego the
only means by which it is possible in an advanced civilization to combine
the security of possession that is necessary to improvement with the equality
of natural opportunity that is the most important of all natural rights.
It is thus at the basis of all social life to set up an unjust inequality
between man and man, compelling some to pay others for the privilege of living,
for the chance of working, for the advantages of civilization, for the gifts
of their God. But it is even more than this. The very robbery that the masses
of men thus suffer gives rise in advancing communities to a new robbery.
For the value that with the increase of population and social advance
attaches to land being suffered to go to individuals who have secured ownership
of
the land, it prompts to a forestalling of and speculation in land wherever
there is any prospect of advancing population or of coming improvement, thus
producing an artificial scarcity of the natural elements of life and labor,
and a strangulation of production that shows itself in recurring spasms of
industrial depression as disastrous to the world as destructive wars. It
is this that is driving men from the old countries to the new countries,
only to bring there the same curses. It is this that causes our material
advance not merely to fail to improve the condition of the mere worker, but
to make the condition of large classes positively worse. It is this that
in our richest Christian countries is giving us a large population whose
lives are harder, more hopeless, more degraded than those of the veriest
savages. It is this that leads so many men to think that God is a bungler
and is constantly bringing more people into his world than he has made provision
for; or that there is no God, and that belief in him is a superstition which
the facts of life and the advance of science are dispelling. ...
As to working-men’s associations, what your Holiness seems to contemplate
is the formation and encouragement of societies akin to the Catholic sodalities,
and to the friendly and beneficial societies, like the Odd Fellows, which
have had a large extension in English-speaking countries. Such associations
may promote fraternity, extend social intercourse and provide assurance in
case of sickness or death, but if they go no further they are powerless to
affect wages even among their members. As to trades-unions proper, it is
hard to define your position, which is, perhaps, best stated as one of warm
approbation provided that they do not go too far. For while you object to
strikes; while you reprehend societies that “do their best to get into
their hands the whole field of labor and to force working-men either to join
them or to starve;” while you discountenance the coercing of employers
and seem to think that arbitration might take the place of strikes; yet you
use expressions and assert principles that are all that the trades-unionist
would ask, not merely to justify the strike and the boycott, but even the
use of violence where only violence would suffice. For you speak of the insufficient
wages of workmen as due to the greed of rich employers; you assume the moral
right of the workman to obtain employment from others at wages greater than
those others are willing freely to give; and you deny the right of any one
to work for such wages as he pleases, in such a way as to lead Mr. Stead,
in so widely read a journal as the Review of Reviews, approvingly to declare
that you regard “blacklegging,” i.e., the working for less than
union wages, as a crime.
To men conscious of bitter injustice, to men steeped in poverty yet mocked
by flaunting wealth, such words mean more than I can think you realize.
When fire shall be cool and ice be warm, when armies shall throw away lead
and iron, to try conclusions by the pelting of rose-leaves, such labor associations
as you are thinking of may be possible. But not till then. For labor associations
can do nothing to raise wages but by force. It may be force applied passively,
or force applied actively, or force held in reserve, but it must be force.
They must coerce or hold the power to coerce employers; they must coerce
those among their own members disposed to straggle; they must do their best
to get into their hands the whole field of labor they seek to occupy and
to force other working-men either to join them or to starve. Those who tell
you of trades-unions bent on raising wages by moral suasion alone are like
those who would tell you of tigers that live on oranges.
The condition of the masses today is that of men pressed together
in a hall where ingress is open and more are constantly coming, but where
the doors
for egress are closed. If forbidden to relieve the general pressure by throwing
open those doors, whose bars and bolts are private property in land, they
can only mitigate the pressure on themselves by forcing back others, and
the weakest must be driven to the wall. This is the way of labor-unions and
trade-guilds. Even those amiable societies that you recommend would in their
efforts to find employment for their own members necessarily displace others.
...
But worse perhaps than all else is the way in which this substituting of
vague injunctions to charity for the clear-cut demands of justice opens an
easy means for the professed teachers of the Christian religion of all branches
and communions to placate Mammon while persuading themselves that they are
serving God. Had the English clergy not subordinated the teaching of justice
to the teaching of charity — to go no further in illustrating a principle
of which the whole history of Christendom from Constantine’s time to
our own is witness — the Tudor tyranny would never have arisen, and
the separation of the church been averted; had the clergy of France never
substituted charity for justice, the monstrous iniquities of the ancient
régime would never have brought the horrors of the Great Revolution;
and in my own country had those who should have preached justice not satisfied
themselves with preaching kindness, chattel slavery could never have demanded
the holocaust of our civil war.
No, your Holiness; as faith without works is dead, as men cannot give to
God his due while denying to their fellows the rights be gave them, so charity
unsupported by justice can do nothing to solve the problem of the existing
condition of labor. Though the rich were to “bestow all their goods
to feed the poor and give their bodies to be burned,” poverty would
continue while property in land continues.
Take the case of the rich man today who is honestly desirous of devoting
his wealth to the improvement of the condition of labor. What can he do?
- Bestow his wealth on those who need it? He may help some who deserve
it, but will not improve general conditions. And against the good he may
do will be the danger of doing harm.
- Build churches? Under the shadow of churches poverty festers and the
vice that is born of it breeds.
- Build schools and colleges? Save as it may lead men to see the iniquity
of private property in land, increased education can effect nothing for
mere laborers, for as education is diffused the wages of education sink.
- Establish hospitals? Why, already it seems to laborers that there are
too many seeking work, and to save and prolong life is to add to the pressure.
- Build model tenements? Unless he cheapens house accommodations he but
drives further the class he would benefit, and as he cheapens house accommodations
he brings more to seek employment and cheapens wages.
- Institute laboratories, scientific schools, workshops for physical experiments?
He but stimulates invention and discovery, the very forces that, acting
on a society based on private property in land, are crushing labor as between
the upper and the nether millstone.
- Promote emigration from places where wages are low to places where they
are somewhat higher? If he does, even those whom he at first helps to emigrate
will soon turn on him to demand that such emigration shall be stopped as
reducing their wages.
- Give away what land he may have, or refuse to take rent for it, or let
it at lower rents than the market price? He will simply make new landowners
or partial landowners; he may make some individuals the richer, but he
will do nothing to improve the general condition of labor.
- Or, bethinking himself of those public-spirited citizens of classic
times who spent great sums in improving their native cities, shall he try
to beautify the city of his birth or adoption? Let him widen and straighten
narrow and crooked streets, let him build parks and erect fountains, let
him open tramways and bring in railroads, or in any way make beautiful
and attractive his chosen city, and what will be the result? Must it not
be that those who appropriate God’s bounty will take his also? Will
it not be that the value of land will go up, and that the net result of
his benefactions will be an increase of rents and a bounty to landowners?
Why, even the mere announcement that he is going to do such things will
start speculation and send up the value of land by leaps and bounds.
What, then, can the rich man do to improve the condition of labor?
He can do nothing at all except to use his strength for the abolition of
the great primary wrong that robs men of their birthright. The justice of
God laughs at the attempts of men to substitute anything else for it. ... read
the whole letter
Henry George: The
Crime of Poverty (1885 speech)
... Nature
gives to labour, and to labour alone; there must be human work before
any article of wealth can be produced; and in the natural state of
things the man who toiled honestly and well would be the rich man,
and he who did not work would be poor. We have so reversed the order
of nature that we are accustomed to think of the workingman as a poor
man.
And if you trace it out I believe
you will see that the primary
cause of this is that we compel those who work to pay others for
permission to do so. You may buy a coat, a horse, a house; there you
are paying the seller for labour exerted, for something that he has
produced, or that he has got from the man who did produce it; but
when you pay a man for land, what are you paying him for? You are
paying for something that no man has produced; you pay him for
something that was here before man was, or for a value that was
created, not by him individually, but by the community of which you
are a part. What is the reason that
the land here, where we stand
tonight, is worth more than it was twenty-five years ago? What is the
reason that land in the centre of New York, that once could be bought
by the mile for a jug of whiskey, is now worth so much that, though
you were to cover it with gold, you would not have its value? Is it
not because of the increase of population? Take away that
population,
and where would the value of the land be? Look at it in any way you
please. ... read the whole speech
Rev. A. C. Auchmuty: Gems from George, a
themed collection of excerpts from the writings of Henry George (with
links to sources)
Co-operation and Competition
MANY if not most of the writers on political economy have treated exchange as
a part of distribution. On the contrary, it belongs to production. It is by exchange,
and through exchange, that man obtains, and is able to exert, the power of co-operation
which, with the advance of civilization, so enormously increases his ability
to produce wealth. — The Science of Political Economy — unabridged:
Book III, Chapter 11, The Production of Wealth: The Office of Exchange in Production • unabridged
Chapter 9, The Office of Exchange in Production
THEY who, seeing how men are forced by competition to the extreme of human wretchedness,
jump to the conclusion that competition should be abolished, are like those who,
seeing a house burn down, would prohibit the use of fire.
The air we breathe exerts upon every square inch of our bodies a pressure of
fifteen pounds. Were this pressure exerted only on one side, it would pin us
to the ground and crush us to a jelly. But being exerted on all sides, we move
under it with perfect freedom. It not only does not inconvenience us, but it
serves such indispensable purposes that, relieved of its pressure, we should
die.
So it is with competition. Where there exists a class denied all right to the
element necessary to life arid labor, competition is one-sided, and as population
increases must press the lowest class into virtual slavery, and even starvation.
But where the natural rights of all are secured, then competition, acting on
every hand — between employers as between employed, between buyers as between
sellers — can injure no one.
On the contrary it becomes the most simple, most extensive, most elastic, and
most refined system of co-operation that, in the present stage of social development,
and in the domain where it will freely act, we can rely on for the co-ordination
of industry and the economizing of social forces.
In short, competition plays just such a part in the social organism as those
vital impulses which are beneath consciousness do in the bodily organism. With
it, as with them, it is only necessary that it should be free. The line at which
the state should come in is that where free competition becomes impossible — a
line analogous to that which in the individual organism separates the conscious
from the unconscious functions. There is such a line, though extreme socialists
and extreme individualists both ignore it. The extreme individualist is like
the man who would have his hunger provide him food; the extreme socialist is
like the man who would have his conscious will direct his stomach how to digest
it. — Protection or Free Trade, chapter 28 econlib
... go to "Gems from George"
Henry George: Thou
Shalt Not Steal
(1887 speech)
Now, here is a desert. Here is a
caravan going along over the desert. Here is a gang of robbers. They
say: "Look! There is a rich caravan; let us go and rob it, kill the men
if necessary, take their goods from them, their camels and horses, and
walk off." But one of the robbers says: "Oh, no; that is
dangerous; besides, that would be stealing! Let us, instead of doing
that, go ahead to where there is a spring, the only spring at which
this caravan can get water in this desert. Let us put a wall around it
and call it ours, and when they come up we won’t let them have any
water until they have given us all the goods they have." That would be
more gentlemanly, more polite, and more respectable; but would it not
be theft all the same? And is it not
theft of the same kind when people go ahead in advance of population
and get land they have no use whatever for, and then, as people come
into the world and population increases, will not let this increasing
population use the land until they pay an exorbitant price? ... read
the whole article
Clarence Darrow: How to Abolish
Unfair Taxation (1913)
Pirates Demand Tribute
Nature prepared the earth for ages to make a mine of iron ore, which is
so useful in civilized life. It was here before man came, and will be here
after
he is gone, and yet a plundering, soulless, conscienceless band of pirates,
called the steel trust, have taken possession of all the iron in America,
and they say to every man who will use it: "You must pay us tribute." And
every time two dollars is paid for their product one dollar goes to labor,
and one dollar is taken as plunder pure and simple, because of the foolish
laws of man. They can take from the farmer and laborer all that they earn
except enough to keep them alive still to toil for the monopolist.
You may make eight-hour laws, you may make laws regulating sweat shops and
factories, but so long as a few rich men own the earth, there will
be a few rich and many millions of helpless poor. As population becomes more
dense,
the proportion of poor will increase. ...
Fundamentally, all law recognizes the right to eminent domain, to take the
portion of any human being for the welfare of the public — that no
man's claim to any portion of the earth shall stand in the way of the common
good.
This is a common law, but in practice it only applies where a rich railroad
wants to get the land of some poor widow.
Everybody who works is poor; nobody would work if they were not poor, and
nobody can get rich working. I never tried it, but I have seen others try
it. The land boomer comes along and gets good car service to this poor man's
home,
and then charges him ten dollars per month instead of five. A lot of reformers
are trying to get parks laid out in the slums, which only make the poor
move, for they cannot pay the increased rent. The greater the population,
the less
the worker gets. As the land becomes valuable, more and more goes to rent.
The bigger the city, the deeper the poverty; the bigger the city the more
degradation, there are the almshouses and gaols filled to overflowing. It
is better for
the men who own the earth to have big cities — but for no one else.
Every man, woman, and child adds to the wealth of the land owner; the others
must
secure land upon which to live, and they must bid with each other for the
right to live. ... read the whole speech
Nic Tideman: Applications
of Land Value Taxation to Problems of
Environmental Protection, Congestion, Efficient Resource Use,
Population, and Economic Growth
VI. Population
Growth
In a world that does not
recognize equal rights to natural
opportunities, having children is a more private decision than when
equal rights to natural opportunities are recognized. If a child
comes into the world with a right only to the product of his or her
labor, then there are few externalities of the decisions people make
about how many children to have. Having more children might reduce
the level of wages, but the consequent harm to sellers of labor
services is offset by the benefit to the buyers of labor
services.
On the other hand, if all persons
are recognized as having equal
rights to natural opportunities, then a larger number of children
means less land and natural resources per person for all the people
born previously. This may be offset at least partially by the greater
economies of scale that are available when there are more people, but
there will still be a range of population growth over which each
decision by a couple to have a child reduces the real incomes of
everyone else. Define such a circumstance as a scarcity of parenting
opportunities.
If parenting opportunities are
scarce and all nations have
populations that grow at the same rate, then any issues of the cost
of having children are internal to each nation. Each nation is free
to divide the cost of additional children between the parents and the
rest of society in whatever way expresses their sense of community.
On the other hand, when nations have populations that grow at
different rates and parenting opportunities are scarce, issues of
justice among nations arise. The children of a rapidly growing nation
will be able to say, "Our numbers are greater than those of our
parents, so we deserve a greater share of the rent of land and
natural resources than our parents received."
It would not be just for the rest
of the world to say, "That's not
our fault. Your parents had too many children. You must now get by
with smaller shares of natural opportunities than the rest of us." It
would not be just because the rights to natural opportunities are
equal rights of persons. They are not contingent on having had
parents who were not excessively prolific. Thus the issue of justice
with respect to population growth arises at the time when different
nations decide to have different populations growth rates.
The people of a nation that is
growing more slowly than another
can justly say to the people of the more rapidly growing nation, "By
your decision to have so many children, you are increasing the
resources that we must set aside to ensure that our children have
opportunities at least as satisfying as the ones we enjoy. You owe us
something for your disproportionate appropriation of the world's
scarce parenting opportunities." Thus the cost (or benefit) that one
nation imposes on others by its differential population growth rate
would be included in the calculation of the nation's total
appropriation of natural opportunities, and therefore in the
equalization payment that the nation received or paid. ... Read the entire article
Nic Tideman: Being Just While
Conceptions of Justice are Changing
A conception of justice is a
framework for resolving questions of what liberties people ought to
have. The smooth functioning of society requires substantial consensus
about conceptions of justice, because without such consensus, people
will take actions and make claims on resources that others regard as
intrusions upon what is properly theirs. This can be expected to lead,
at a minimum, to disharmony and possibly to violent conflict. On the
other hand, when people agree on a conception of justice and who is
competent to interpret it, conflicts will be less likely to arise, and
those that do arise can be settled more easily. Thus there is strong
impetus toward stability in any society's conception of justice: Any
doubts about a shared conception of justice may be suppressed or hidden
to preserve the advantages of consensus.
Moral evolution, however, can require conceptions of
justice to
change, as when the world came to recognize that slavery could not be
just, or that women must be accorded the same civil rights as men.
When, as with the abolition of slavery, a new conception of justice
entails the elimination of the sale value of what had previously been
assets, there will be calls for compensation, on the ground that, as
provided in the fifth and fourteenth amendments to the U.S.
Constitution, governments should not take property without
compensation. ...
The paper argues that there are a variety of factors that
attenuate claims for compensation and make a justifiable system of
compensation so complex that it may be unworkable. But if there is to
be a system of compensation, the one justifiable source of funds to
finance it is assets that have been acquired by appropriating or buying
land and then selling it. ...
The issue of compensation will be examined by considering some
idealized cases, identifying the principles they exhibit, and then
asking how those principles apply to the circumstances in which modern
societies are likely to find themselves. ...
Case 1. A republic of the former
Soviet Union privatizes land by selling it to the highest bidders ...
Case 2. There is an agricultural
society that has been using a rule that whoever plants on land first
in any year owns the harvest of that land that year. ...
Case 3. This is a variation on Case
2. First the land is divided equally among existing families, with an
understanding that land rights will be tradable. ...
Case 4. There is an agricultural
society in which land is
initially redivided equally each year among all adults. ...
Case 5. Land has been privately owned and rather equally
distributed since time immemorial. One day people suddenly realize
that land should be regarded as the heritage of all citizens. ...
Case 6. This is a variation on case
5, where the recognition that equal access to land should be a
birthright occurs gradually, over decades ...
Case 7. This is a variation on case
6, where there are initially substantial taxes on labor and capital.
...
Having considered these seven
idealized cases, one can now
summarize the principles they embody.
- Case 1 and 2 both embody the principle that when a mistake
in social rules is corrected, it is reasonable to require people to
relinquish the expectations that the mistaken rules gave them. In one
case this implied that compensation for the loss of sale value of land
titles should be provided, in the other case that it should not be
provided.
- Case 3 embodies the principle that it is sometimes
appropriate to restructure past private transactions on the basis of
new understandings of the requirements of justice.
- Case 4 embodies the principle that the perpetrators of
injustice and their heirs are particularly responsible for providing
compensation when the claims they appropriated are overturned.
- Case 5 embodies three principles:
- first, that there can be circumstances in which the
costs of a new moral understanding must be left where they fall,
because there is no one to whom they can properly be shifted;
- second, that compensation financed by taxation should
be supported by a finding that those who are taxed are, as a class,
particularly responsible for, or have been beneficiaries of, the
discredited understanding;
- third, that if compensation is provided, a person's
past gains from the discredited understanding offset claims for losses
from the new understanding.
- Case 6 embodies the principle that public moral debate
puts people on notice that a future political decision might eliminate
the value of their acquisitions without compensation.
- Case 7 embodies the principle that if compensation is
provided, a person's past benefits from the new understanding offset
claims for losses from the new understanding.
One can now ask what lessons
these principles hold for the
situations in which actual societies are likely to find
themselves.
... Read the whole article
Nic Tideman: The
Constitutional Conflict Between Protecting
Expectations and Moral Evolution
Power,
Population and Process
There are two other difficulties
that are more serious.
- First, the existing distribution of recognized exclusive
rights to natural opportunities (land, mineral resources, fishing
rights, water rights, etc.) is the outcome of a game of power, and
those who have won at this game have great power are loathe to part
with their winnings.
- Second, Malthusian analysis has led people to expect that
if the value of exclusive use of natural opportunities were distributed
equally, population would expand until everyone was at a subsistence
level.
There is a solution to the second
problem, contained in the idea
that all persons have equal rights to the use of natural
opportunities. If the crowding effects of additional persons outweigh
the beneficial effects of greater economies of scale, then any region
that has an above-average population growth rate is appropriating
more than its share of the scarce natural opportunity to be a parent.
The costs that this region thereby imposes on other regions can
justly be subtracted from what would otherwise be its claim on the
value of using natural opportunities. Each region could then decide
for itself whether to pass those costs on to individual couples who
decide to conceive children.
Similarly, when a region imposes
costs on others through
interregional pollution, the costs so imposed should be subtracted
from the region's claim to the value of exclusive use of natural
opportunities. The great challenge is to overcome the entrenched
power that benefits from continued blindness to moral necessity. The
mechanism must not be force of arms, for that entails too great a
risk of installing a new power elite who would be as unprincipled as
the first. Nor should the mechanism be the power of majorities,
through legislation and referenda, for these processes can also be
used for the selfish aggrandizement of those who control them. It is
good that constitutions prohibit the taking of property without just
compensation. It is to be hoped that courts will interpret such
restricitons as prohibiting taxes that take all of the value of
things currently regarded as property.
When respect for a newly
understood moral truth requires the
dissappointment of previously protected expectations, those who would
push their fellow citizens to incorporate that truth into the
governmental process should be obliged to have their ideas reviewed
in a constitutional amnedment process that will ensure that they will
be adopted only if a broad consensus on them is achieved. When people
are ready to see a new moral truth, that truth can overcome such a
hurdle.
Read the whole article
Nic Tideman: Global Economic Justice, followed
by Creating
Global Economic Justice
Justice and
the Demographic Equation
If
the population of one nation grows faster than the populations
of other nations, then in the future the citizens of the more rapidly
growing nation will be able to say to the other nations, "We
constitute a greater percentage of the world's population than our
forebears. We deserve a correspondingly larger proportion of the
value of using the world's scarce natural opportunities." It would
not be just for the rest of the world to reply, "It's not our fault
that your parents had so many children. You only get as a nation the
same fraction that your parents got. You must each do with less."
This would not be just because the equal right of every person to
natural opportunities is not contingent on having had parents who
were not excessively prolific. The equal right is an equal right
of
persons. But this means that at the earlier time when the
population
was growing, the citizens of the less rapidly growing nation could
say to those of the more rapidly growing nation, "Your decision to
have a population that grows more rapidly than the world population
requires us to set aside a greater quantity of resources for future
generations, as their shares of depletable resources, and as
compensation for greater scarcity of land in the future. This cost
that you are imposing on us must be counted in the calculation of
your share of natural opportunities." Thus the costs of
differences
in population growth rates are counted in the calculation of
compensation for unequal appropriations of natural opportunities.
Similarly, those nations whose populations grow more slowly than
average can claim a credit for their slower growth.
The analysis above takes no account of the possible benefits of
a
greater population. With a greater population, there will be
additional economies of scale that will lower the prices of some
goods and make it feasible to bring to market other goods that would
be unavailable if population did not grow. A nation with a population
that grows at an above-average rate had a right to credit from this
source of benefits to others. Such a nation might also expect to find
that it has a greater number of highly talented people who produce
innovations, permitting the nation to claim credit for the value of
those innovations to future generations. ...
Conclusion
Humanity needs a system for deciding what belongs to which
nation
and for managing the unintended impacts that nations have on one
another. It can be expected that any workable system will be based on
principles of justice. This paper has outlined such a system, based
on two axioms, namely that people have rights to themselves and that
all persons have equal rights to natural opportunities. A companion
paper in the next volume of this journal will explore the implication
of this system for justice within nations and the processes that
might be used to gain recognition for such a system.
...
In Part II, the author addresses
two questions:
1. What would the
acceptance of this framework for justice imply for the justice of
social arrangements within a nation?
2. What devices might be used to extend the acceptance of such a system
of justice once the preponderance of nations had accepted it?
... Read the whole article
Nic Tideman: The Shape of a World
Inspired by Henry George
How would the world look if its
political institutions were
shaped by the conception of social justice advanced by Henry
George?
Jeff Smith and Kris Nelson: Giving
Life to the Property Tax Shift (PTS)
John Muir is right. "Tug on any
one
thing and find it connected to everything else in the universe." Tug on
the property tax and find it connected to urban slums, farmland loss,
political favoritism, and unearned equity with disrupted neighborhood
tenure. Echoing Thoreau, the more familiar reforms have failed to
address this many-headed hydra at its root. To think that the root
could be chopped by a mere shift in the property tax base -- from
buildings to land -- must seem like the epitome of unfounded faith. Yet
the evidence shows that state and local tax activists do have a
powerful, if subtle, tool at their disposal. The "stick" spurring
efficient use of land is a higher tax rate upon land, up to even the
site's full annual value. The "carrot" rewarding efficient use of land
is a lower or zero tax rate upon improvements. ...
What's won or lost is a value generated by
society. That is, land rises in value
- where a new resource is
discovered (during a gold rush, more money is made by land developers
than by prospectors),
- where
population grows (see the Sun Belt and
verdant Northwest),
- where technology advances (witness
the land values
in the various Silicon Valleys, Forests, etc),
- where infrastructure
expands (e.g., near a new road or sewer), and
- where society cooperates
(e.g., in communities that organize street fairs, neighborhood watches,
etc).
These factors driving land value are not
improvements made by
lone owners but by the entire community. The closest correlation to
land value is density and no one person creates that. Hence the site
value levy merely puts public values in the public treasury for public
benefit, as untaxing homes, sales, and income leaves
privately-generated values in private pockets.
A big problem needs a big solution which in turn
needs a
matching shift of our prevailing paradigm. Geonomics -- advocating that
we share the social value of sites and natural resources and untax
earnings -- does just that. Read the whole article
Kris Feder: Progress and Poverty
Today
As this book was written, the
Industrial Revolution was
transforming America and Europe at a breathless pace. In just a
century, an economy that worked on wind, water, and muscular effort
had become supercharged by steam, coal, and electricity. Canals,
railroads, steamships and the telegraph were linking regional
economies into a national and global network of exchange. The United
States had stretched from coast to coast; the western frontier was
evaporating.
American journalist and editor
Henry George marveled at the
stunning advance of technology, yet was alarmed by ominous trends.
Why had not this unprecedented increase in productivity banished want
and starvation from civilized countries, and lifted the working
classes from poverty to prosperity? Instead, George saw that the
division of labor, the widening of markets, and rapid urbanization
had increased the dependence of the working poor upon forces
beyond their control. The working poor were always, of course, the
most vulnerable in depressions, and last to recover from them.
Unemployment and pauperism had appeared in America, and indeed, were
more prevalent in the developed East than in the aspiring West. It
was "as though a great wedge were being forced, not underneath
society, but through society. Those who are above the point of
separation are elevated, but those who are below are crushed down."
This, the "great enigma of our times," was the problem George set out
to solve in Progress and Poverty.
...
In a competitive economy, the
earnings of the factors of
production measure their separate contributions to the value of the
product. Payments for the use of labor are called wages; payments for
land are called rent; the income of capital is interest. In George's
terms, the distress of the working classes had to do with a
persistently low level of real wages. "Why," he asked, "in spite of
increase in productive power, do wages tend to a minimum which will
give but a bare living?"
The book proceeds systematically.
First, George explores the
prevailing scholarly and popular explanations, which relied
principally on the famous population theory of Malthus, in
combination with the "wage fund" theory of British political economy.
Together these theories implied that the aggregate income of labor
depends upon the amount of capital devoted to the payment of wages.
An increase in wages required an increase in the amount of capital
per worker. However, any rise in living standards above mere
subsistence motivated workers to marry younger and bear more
children, until population growth caused capital per worker - and,
therefore, wages - to recede again.
Moreover, population growth
diminished agricultural productivity
by forcing recourse to inferior soils. Technological advance and
capital accumulation might afford a period of relative prosperity -
but ultimately, increasing applications of labor to a fixed amount of
land could raise output only at a diminishing rate. In short,
immutable laws of nature - the population principle and the law of
diminishing returns to land - were widely believed to explain the
persistence of poverty.
To
George, the Malthusian analysis was abhorrent: It asserted that
no institutional reform could fundamentally alter the pattern of
income distribution, and that charitable support for the needy only
compounded the problem - by lowering death rates and raising birth
rates. Fortunately, he found this theory of wages to be
theoretically
flawed on several grounds. He also found it to be incompatible with
empirical facts, based on historical case studies from Ireland,
China, India, the United States and elsewhere. Today, most
development economists agree with George that famine and mass poverty
have more to do with faulty human institutions than with the
limitations of nature. ...
Most economists deem it their
business to evaluate the efficiency
of policy choices, but, claiming no special knowledge of ethics, they
leave it to philosophers and the political process to evaluate
questions of justice. Can it be true that society's arrangements to
provide for common needs must always confront a divisive choice
between equity and efficiency - between what is fair and what is
feasible?
Henry George not only denied it;
he asserted the reverse: Full
recognition of economic rights and responsibilities would reveal the
goals of equity and efficiency to be mutually reinforcing. Neither
social justice nor a well-functioning free market system can long be
enjoyed without the other. "The laws of the universe are
harmonious," George proclaimed. His analysis showed that the root
cause of widening inequality lies not in the laws of nature, but in
social maladjustments which ignore them. Moreover, the breach of
justice which underlies the problem of poverty is not merely
incidental to economic development; it impedes development, leading
to wider and wider inequality. ...Read
the whole article
Mark Twain Archimedes
As I owned all the land, they
would
of course, have to pay me rent. They could not reasonably expect me
to allow them the use of the land for nothing. I am not a hard man,
and in fixing the rent I would be very liberal with them. I would
allow them, in fact, to fix it themselves. What could be fairer? Here
is a piece of land, let us say, it might be a farm, it might be a
building site, or it might be something else - if there was only one
man who wanted it, of course he would not offer me much, but if the
land be really worth anything such a circumstance is not likely to
happen. On the contrary, there would be a number who would want it,
and they would go on bidding and bidding one against the other, in
order to get it. I should accept the highest offer - what could be
fairer? Every increase of population,
extension of trade, every
advance in the arts and sciences would, as we all know, increase the
value of land, and the competition that would naturally arise would
continue to force rents upward, so much so, that in many cases the
tenants would have little or nothing left for themselves. ... Read
the whole piece
Fred Foldvary: A Geoist
Robinson Crusoe Story
Once upon a time, Robinson G.
Crusoe was the only survivor of a ship
that sunk. He floated on a piece of wood to an unpopulated island.
Robinson was an absolute geoist. He believed with his mind, heart, and
soul that everyone should have an equal share of land rent.
Since he was the only person on this island, it was all his. He
surveyed the island and found that the only crop available for
cultivation was alfalfa sprouts. The land was divided into 5 grades
that could grow 8, 6, 4, 2, and zero bushels of alfalfa sprouts per
month. There was one acre each for 8, 6, and 4, and 100 acres of
2-bushel land. For 8 hours per day of labor, he could work 4 acres. So
he could grow, per month, 8+6+4+2 = 20 bushels of alfalfa sprouts, much
more than enough to feed on.
One day another survivor of a sunken ship floated to the island.
His
name was Friday George. Friday was a boring talker and kept chattering
about trivialities, which greatly irritated Robinson. "I possess the
whole island. You may only have this rocky area," said Robinson. ... Read the whole piece
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
During the late 19th century,
the burden of various direct taxes was
not so large that many common people felt their acute impact. It was,
however, a time of extreme disparities between the poor and the
wealthy, and the single tax was a means by which to redress some of
those disparities. It would also foster the availability of employment
by making labor more attractive relative to land and capital
investment. In a word, people would more likely have to earn their
money. The fruits of land wealth, distributed among people equally in
the form of government services, would go far toward both enhancing
economic opportunity and correcting inequality.
Georgists today adhere to much the same points of view, although
there
are some significant differences. George himself was an ardent free
trader, mainly because he believed that the single tax should supplant
tariffs. After Ricardo, he accepted the idea of comparative advantage
that arose from trade, but only after land (resource) rents were
collected so as to preclude the raping of the natural environments of
countries rich in such resources. He
also believed that population
growth was good — the more the better, and took special pains to refute
Malthus. But one should also recall that he was living at a time when
the expanse of the American continent was still open to any homesteader
who chose to do so. Population growth was not a problem at that time.
These elements of George’s thought are inconsequential to his
followers today. Yet it is important
to note that Georgists are not socialists; they do not
subscribe to the view that society should own the means of production.
These should remain privately owned by and large (except perhaps as
today’s economic theory would call for, i.e., natural monopolies,
public goods, and other government instruments). They are, rather,
free-marketers in the full sense of the world, even more ardently than
many contemporary American conservatives. He believed that
removing the
accretion of economic rent from landsites would restore self-regulating
equilibrium of the marketplace, thus obviating the need for the heavy
hand of government controls. ... read the whole article
Joseph Fels: True Christianity and
My Own Religious Beliefs
Therefore, I believe that the
fundamental evil, the great God-denying
crime of society, is the iniquitous system under which men are
permitted to put into their pocket, confiscate, in fact, the
community-made values of land, while organized society confiscates for
public purposes a part of the wealth created by individuals. Do you
agree to that?
Using a concrete illustration: I own in the city of Philadelphia
11-1/2
acres of land, for which I paid 32,500 dollars a few years ago. On
account of increase of population and industry in Philadelphia, that
land is now worth about 125,000 dollars. I have expended no labor or
money upon it. So I have done nothing to cause that increase of 92,500
dollars in a few years. My fellow-citizens in Philadelphia created it,
and I believe it therefore belongs to them, not to me. I believe that
the man-made law which gives to me and other landlords values we have
not created is a violation of the divine law. I believe that Justice
demands that these community-made values be taken by the community for
common purposes instead of taxing enterprise and industry. Do you
agree?
... read
the whole letter
Walter Rybeck and Ronald Pasquariello: Combating
Modern-day Feudalism: Land as God’s Gift
What gives value
to land. Any
real estate textbook will explain that the three factors for
determining land value are "location, location and location." And any
property owner will affirm this truth. But
what generates locational
value? Three phenomena: God, people and public activities.
- God the creator, Genesis tells us,
"looked at
everything he had made, and he found it very good." We recognize this
goodness in the fertility of the soil, natural harbors, scenic beauty,
the availability of water, and the subsurface riches of coal, oil,
gold, iron and other substances. The land has a God-given goodness and
is one of the gifts through which God sustains us.
- People create land values simply
because they are
social beings, consumers and producers. The more people concentrated on
a piece of land, the higher its value. The press of population
intensifies the demand for homes, jobs and services; this is what makes
Manhattan far more valuable than downtown Richmond, Virginia, and
Richmond more valuable than Anderson, Indiana, and Anderson more
valuable than an uninhabited Utah crossroad.
- Finally, the public or government
generates land
values by providing streets, schools, police protection and other
infrastructures. Opening a subway system for the District of Columbia
in 1976 gave Washington’s blighted downtown a new lease on life. The
subway and its riders are stimulating the economy along all of its
corridors. According to a 1981 congressional study, "a minimum of $2
billion in land values has already been added to the existing land
value base." However, it concluded that "only a trickle" of these new
values finds its way back to local government through the property tax.
The biggest share goes to people "lucky enough to own land within easy
access of Metro stations." ...
Read
the whole article
Frank Stilwell and Kirrily Jordan: The
Political Economy of Land: Putting Henry George in His Place
George saw land as a community resource provided by nature, to which
every human being had an equal right. He argued that, since land was fixed
in
supply, the system of private land ownership allowed the wealthy few to
enjoy exclusive rights to land and its benefits, while alienating the poorer
majority from land ownership and forcing them to pay rent to landowners
in order to access this necessary resource. Moreover, the collection of
rents by landowners allowed them to increase their wealth without contributing
to the productive efforts of society. As the population grew, so too did
the demand for land, forcing rents and land values ever higher. In addition,
increases in land value resulting from publicly-funded developments, such
as roads and public transport systems, unduly benefited landowners at the
expense of the community. Such unearned gains from landownership encouraged
speculation in land, pushing prices even higher, while exposing the economy
to the risks of speculative ‘booms’ and ‘busts’.
... read the whole article
Nic Tideman: The Morality of Taxation:
The Local Case
Consider the economic equilibrium of such a system. What taxes should one
expect to find? If it is very inexpensive to move from one place to another,
then the utility that people achieve in any one community cannot be significantly
lower that what they would achieve in any other community, and localities
will only be able to tax people to the extent that their presence in the
community
generates net costs to the community. And there are some costs of added
population -- greater congestion, perhaps higher costs of fire and
police protection, and perhaps other costs as well. But there are also benefits
to a community
of greater population, arising from the opportunity of all other residents
to trade with the new residents. Thus communities would not be able to
raise much revenue from income tax or taxes on capital before they would
drive residents
and investment away. It might seem that there would be no way that localities
could finance themselves.
Such a conclusion would be unwarranted, because there is a very significant
source of public revenue that can survive when localities compete for mobile
residents. This source is land. When people are taxed in proportion to the
land they possess, no land moves to another locality where taxes are lower.
Thus two questions arise:
- Would taxes on land be sufficient to finance the public activities that
ought to be undertaken, and
- would such a system be fair? ... read
the whole article
Peter Barnes: Capitalism
3.0 — Chapter 2: A Short History of Capitalism (pages 15-32)
DESTRUCTION OF NATURE
Humans began ravaging nature long before capitalism was a gleam in Adam
Smith’s eye. Surplus capitalism, however, has exponentially enlarged
the scale of that ravaging.
I promised no grim numbers, but I’ll cite just one. In 2005, a United
Nations–sponsored research team reported that roughly 60 percent of
the ecosystems that support life on earth are being used unsustainably. Such
overuse, reported the Millennium Ecosystem Assessment, increases the likelihood
that abrupt, nonlinear changes will seriously affect human well-being. The
potential consequences include floods, droughts, heat waves, fishery collapse,
dead zones along coasts, sea level rises, and new diseases.
Thoughtful people can debate whether population or technology is more responsible
than capitalism for our loss of ecosystems and biodiversity. No doubt all
play a role. But most of the damage isn’t done by the numerous poor;
it’s done by the far fewer rich. The United States, for example, with
5 percent of the world’s people, has dumped nearly 30 percent of our
species’ cumulative carbon dioxide wastes into the atmosphere. It’s
our excess consumption, rather than the poor’s meager gleanings, that’s
the larger problem, and surplus capitalism is the handmaiden of that excess.
Technology, of course, greatly magnifies our impact on the planet, but technology
by itself is mere know-how. It’s the choice of technologies, and the
scale at which they’re deployed, that affects the planet. Electricity,
for example, can be generated in many ways. When corporations choose among
them, however, their choice is driven not by “least harm to nature,” but
by “most bang for the buck.” And, in doing their calculations,
they count the cost of nature as zero. Hence we have lots of fossil-fuel
burning and little use of solar, wind, and tidal energy.
The same calculus drives corporations’ approach to agriculture, logging,
and many other activities. The result is at once humbling and chilling: capitalism
as we know it is devouring creation. It’s living off nature’s
capital and calling it growth. ... read
the whole chapter
Rev. A. C. Auchmuty: Gems from George, a
themed collection of
excerpts from the writings of Henry George (with links to sources)
DOES not the fact that all of the things which furnish man's subsistence
have the power to multiply many fold — some of them many thousand
fold, and some of them many million or even billion fold — while
he is only doubling his numbers, show that, let human beings increase to
the full extent of their reproductive power, the increase of population
can never exceed subsistence? This is clear when it is remembered that
though in the vegetable and animal kingdoms each species, by virtue of
its reproductive power, naturally and necessarily presses against the conditions
which limit its further increase, yet these conditions are nowhere fixed
and final. No species reaches the ultimate limit of soil, water, air, and
sunshine; but the actual limit of each is in the existence of other species,
its rivals, its enemies, or its food. Thus the conditions which limit the
existence of such of these species as afford him subsistence man can extend
(in some cases his mere appearance will extend them), and thus the reproductive
forces of the species which supply his wants, instead of wasting themselves
against their former limit, start forward in his service at a pace which
his powers of increase cannot rival. If he but shoot hawks, food-birds
will increase: if he but trap foxes the wild rabbits will multiply; the
bumble bee moves with the pioneer, and on the organic matter with which
man's presence fills the rivers, fishes feed. — Progress & Poverty — Book
II, Chapter 3: Population and Subsistence: Inferences from Analogy
IF bears instead of men had been shipped from Europe to the North American
continent, there would now be no more bears than in the time of Columbus,
and possibly fewer, for bear food would not have been increased nor the conditions
of bear life extended, by the bear immigration, but probably the reverse.
But within the limits of the United States alone, there are now forty-five
millions of men where then there were only a few hundred thousand, and yet
there is now within that territory much more food per capita for the forty-five
millions than there was then for the few hundred thousand. It is not the
increase of food that has caused this increase of men; but the increase of
men that has brought about the increase of food. There is more food, simply
because there are more Man. — Progress & Poverty — Book II,
Chapter 3: Population and Subsistence: Inferences from Analogy
TWENTY men working together will, where nature is niggardly, produce more
than twenty times the wealth that one man can produce where nature is most
bountiful. The denser the population the more minute becomes the subdivision
of labor, the greater the economies of production and distribution, and,
hence, the very reverse of the Malthusian doctrine is true; and, within the
limits in which we have any reason to suppose increase would still go on,
in any given state of civilization a greater number of people can produce
a larger proportionate amount of wealth and more fully supply their wants,
than can a smaller number. — Progress & Poverty — Book II,
Chapter 4: Population and Subsistence: Disproof of the Malthusian Theory
... go to "Gems from George"
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