Usufruct
Google gathers these definitions of USUFRUCT:
- The right to enjoy other goods with the obligation to preserve them, except
where the law authorises otherwise. www.gruposantander.com/pagina/indice/0,,659_3_2,00.html
- (Legal-Civil Law) The right of enjoying a thing, the property of which
is vested in another, and to draw from the same all the profit, utility,
and advantage which it may produce, provided it be without altering the substance
of the thing. For example, in Nevada, the state's water belongs to the
people,
but is permitted, through the water rights permitting process, to be used
beneficially by other individuals or entities. www.nalms.org/glossary/lkword_u.htm
- a legal term from the Roman Empire (in Latin, usufructus), meaning "using
the fruit" of land claimed by the State without injuring or destroying
the ecological infrastructure. www.maquah.net/We_Have_The_Right_To_Exist/WeHaveTheRight_26Glossary.html
- Usufruct is the legal right to use and derive profit from property that
belongs to another person, as long as the property is not damaged. In many
legal systems of property, buyers of property may only purchase the usufruct
of the property. en.wikipedia.org/wiki/Usufruct
Henry George: The Common Sense of Taxation (1881
article)
The true purposes of government are well stated in the preamble to the Constitution
of the United States, as they are in the Declaration of Independence. To
insure the general peace, to promote the general welfare, to secure to each
individual the inalienable rights to life, liberty, and the pursuit of happiness — these
are the proper ends of government, and are therefore the ends which in every
scheme of taxation should be kept in mind.
As to amount of taxation, there is no principle which imposes any arbitrary
limit. Heavy taxation is better for any community than light taxation, if
the increased revenue be used in doing by public agencies things which could
not be done, or could not be as well and economically done, by private agencies.
Taxes could be lightened in the city of New York by dispensing with street-lamps
and disbanding the police force. But would a reduction in taxation gained
in this way be for the benefit of the people of New York and make New York
a more desirable place to live in? Or if it should be found that heat and
light could be conducted through the streets at public expense and supplied
to each house at but a small fraction of the cost of supplying them by individual
effort, or that the city railroads could be run at public expense so as to
give every one transportation at very much less than it now costs the average
resident, the increased taxation necessary for these purposes would not be
increased burden, and in spite of the larger taxation required, New York
would become a more desirable place to live in. It is a mistake to condemn
taxation as bad merely because it is high; it is a mistake to impose by constitutional
provision, as in many of our States has been advocated, and in some of our
States has been done, any restriction upon the amount of taxation. A restriction
upon the incurring of public indebtedness is another matter. In nothing
is the far-reaching statesmanship of Jefferson more clearly shown than in
his
proposition that all public obligations should be deemed void after a certain
brief term — a proposition which he grounds upon the self-evident truth
that the earth belongs in usufruct to the living, and that the dead have
no control over it, and can give no title to any part of it. But restriction
upon public debts is a very different thing from restriction upon the power
of taxation, and reasons which urge the one do not apply to the other. Nor
is increased taxation necessarily proof of governmental extravagance. Increase
in taxation is in the order of social development, for the reason that social
development tends to the doing of things collectively that in a ruder state
are done individually, to the giving to government of new functions and the
imposing of new duties. Our public schools and libraries and parks, our signal
service and fish commissions and agricultural bureaus and grasshopper investigations,
are evidences of this.
But while no limit can be properly fixed for the amount of taxation, the
method of taxation is of supreme importance. A horse may be anchored by fastening
to his bridle a weight which he will not feel when carried in a buggy behind
him. The best ship may be made utterly unseaworthy by the bad stowage of
a cargo which properly placed would make her the stiffer and more weatherly.
So enterprise may be palsied, industry crushed, accumulation prevented, and
a prosperous country turned into a desert, by taxation which rightly levied
would hardly be felt. ... read the whole article
Henry George: The Crime
of Poverty (1885 speech)
Yet that is not any more
absurd than our land titles. From whom
do they come? Dead man after dead man. Suppose you get on the
cars here going to Council Bluffs or Chicago. You find a passenger
with his baggage strewn over the seats. You say: "Will you give
me a seat, if you please, sir?" He replies: "No; I bought
this seat." "Bought this seat? From whom did you buy
it?" I bought it from the man who got out at the last
station," That is the way we manage this earth of ours.
Is it not a self-evident truth,
as Thomas Jefferson said, that "the land belongs in usufruct to
the living," and
that they who have died have left it, and have no power to say how it
shall be disposed of? Title to land! Where can a man get any title
which makes the earth his property? There is a sacred right to
property — sacred because ordained by the laws of nature, that
is to say, by the laws of God, and necessary to social order and
civilisation. That is the right of property in things produced by
labour; it rests on the right of a man to himself. That which a man
produces, that is his against all the world, to give or to keep, to
lend, to sell or to bequeath; but how can he get such a right to land
when it was here before he came? Individual claims to land rest only
on appropriation. I read in a recent number of the "Nineteenth
Century," possibly some of you
may have read it, an article by an ex-prime minister of Australia in
which there was a little story that attracted my attention. It was of
a man named Galahard, who in the early days got up to the top of a
high hill in one of the finest parts of western Australia. He got up
there, looked all around, and made this proclamation: "All
the land that is in my sight from the top of this hill I claim for
myself; and all the land that is out of sight I claim for my son
John." ... read the whole speech
Henry George: The Wages of
Labor
The equality we would bring
about is not the equality of
fortune, but the equality of natural opportunity; the equality that
reason and religion alike proclaim – the equality in usufruct of all
His children to the bounty of Our Father Who art in Heaven! ... read
the whole article
Henry George: The
Land for the People (1889 speech)
... We start out with these two
principles, which I think are clear and self-evident: that which a man
makes belongs to him and can by him be given or sold to anyone that he
pleases. But that which existed before man came upon the earth, that
which was not produced by man, but which was created by God -- that
belongs equally to all men. As no man made the land, so no man can
claim a right of ownership in the land. As God made the land, and as we
know both from natural perception and from revealed religion, that God
the Creator is no respecter of persons, that in His eyes all men are
equal, so also do we know that He made this earth equally for all the
human creatures that He has called to dwell upon it. We start out with
this clear principle that as all men are here by the equal permission
of the Creator, as they are all here under His laws equally requiring
the use of land, as they are all here with equal right to live, so they
are all here with equal right to the enjoyment of His bounty.
We claim that the land
of Ireland, like the land of every country, cannot justly belong
to any class, whether that class be large or small; but that the land
of Ireland, like the land of every other country, justly belongs in usufruct to the whole people of
that country equally, and that no man and no class of men can have any
just right in the land that is not equally shared by all others.
...
THESE are the plain, simple principles for which we contend,
and our practical measure for restoring to all men of any country
their equal rights in the land of that country is simply to abolish
other taxes, to put a tax upon the value of land, irrespective of the
improvements, to carry that tax up as fast as we can, until we absorb
the full value of the land, and we say that that would utterly
destroy the monopoly of land and create a fund for the benefit of the
entire community. How easy a way that is to go from an unjust
situation like the present to an ideally just situation may be seen
among other things in this. Where you propose to take land for the
benefit of the whole people you are at once met by the demands of the
landlords for compensation. Now, if you tax them, no one ever heard
of such an idea as to compensate a people for imposing tax.
In that easy way the land can
again be made the property in
usufruct of
the whole people, by a gentle and gradual process. ...Read the whole speech
The Most Rev. Dr Thomas Nulty, Roman Catholic Bishop of Meath
(Ireland): Back to the Land
(1881)
Distinction Between
Individual Rights and Community
Rights.
Usufruct, therefore, is the highest form
of property that
individuals can hold in land. On the other hand, I have shown
that
the cultivator's right of property in the produce of the land, in the
improvements he has made in the productiveness of the land, and in
its undisturbed occupation as long as he continues to improve it --
that these various rights are all founded on the strictest principles
of justice, and that their recognition and protection by the State
will secure for the land the highest culture and improvement it is
capable of receiving, and will draw from it, without fail, the
largest returns of human food it is capable of yielding.
On these immutable principles of
justice and right, the order,
progress and welfare of society depend. They allow free scope and
hold out the highest encouragement to the fullest development of the
energy and activity of human industry and enterprise, by securing to
everyone the full fruits of his labour, and recognising in him a
right of property to all that his hands produce. They guarantee to
him immunity and protection from disturbance as long as he devotes
himself with earnestness and zeal to his industrial pursuits.
On the other hand, if a man,
through indolence or incompetence,
allows his land to run wild, to return to its primitive sterility and
barrenness, so as to produce nothing at all, or at all events, much
less than it is capable of yielding, it is no hardship to that man if
these principles call on him to surrender a trust which he held from
society, and which, to the great detriment of society, he has so
grievously abused.
Finally, it is no injustice to
refuse the remuneration of labour
to those who have not laboured at all. This usufruct, therefore, is a
right of property in land, which is held mainly for the benefit of
the public and for the advancement of the general interests of the
community. And yet the general interests of the community art hardly
distinguishable from the private interests of the usufructuary. The
larger the amount of permanent improvements made in the soil, and the
richer and more abundant returns it will yield, the better will it be
for both interests.
Public and Private Interests.
An usufructuary or
farmer
who labours might and main for his own
self-interests, labours with the same amount of earnestness and zeal
for the interests of the public as well. But it is the consideration
of the public interests that will determine the continuity of his
occupancy. The continuity of his occupancy entirely depends on the
continuity of its real, practical effectiveness for the advancement
of the interests of the public. The moment it ceases to be useful and
beneficial to the public welfare, that moment it ceases to have a
right to exist any longer. If individuals could have a right of
Private Property in Land, that right would not be fettered by these
responsibilities; in fact, it would not be liable to any
responsibility at all. ....
How Political Economists Define Rent
Adam Smith says: "Rent may be considered as the produce of those
powers of nature the use of which the landlord lends to the farmer.
It is the work of nature which remains after deducting or
compensating all that can be regarded as the work of man. It is
seldom less than a fourth, and frequently more than a third of the
whole produce." The part then of the agricultural products of the
land which is the result of the operations of the powers of nature is
sometimes more than a third of the whole -- and that is the Rent of
the landlord.
Ricardo, the inventor of the
celebrated theory of Rent, called
after his name (Ricardo's "Theory of Rent"), defines Rent to be:
"That portion of the produce of the earth which is paid to the
landlord for the use of the original and indestructible powers of the
soil. It is often confounded with the interest and profit of
capital… In the future pages of this work, then, whenever I
speak of the Rent of land, I wish to be understood as speaking of the
compensation which is paid to the owner of the land for the use of
its original and indestructible properties."
Scrope writes of it: "The value of
land and its power of yielding
a Rent are due to two circumstances. 1. The appropriation of its
natural power. 2. The labour applied to its amelioration. Under the
first of these relations Rent is a monopoly. It restricts our
usufruct and enjoyment of the
gifts which God has given to men for
the satisfaction of their wants."
Senior thus speaks of Rent: "The
instruments of production are
labour and natural agents. Natural agents having been appropriated,
proprietors charge for their use under the form of Rent, which is the
recompense of no sacrifice whatever, and is received by those who
have neither laboured nor put by, but who merely hold out their hands
to accept the offerings of the rest of the community."
McCulloch defines it: "What is
properly termed Rent is the sum
paid for the use of the natural and inherent powers of the soil. It
is entirely distinct from the sum paid for the use of buildings,
enclosures, roads or other ameliorations." Rent is, then, always a
monopoly.
Lastly, Mill says: "The land is
the principal of the natural
agents which are capable of being appropriated, and the consideration
paid for its use is called Rent. . . .It is at once evident that Rent
is the effect of a monopoly."
Landlords Sow Not, But They
Reap. ...
... The prices, therefore, of "the raw products"
thus ranging very
high, the value of the soil which produced them also rises
enormously; indeed, the vast sums which the nation pays for its food,
for nearly all the necessaries and many of the luxuries of life, pass
directly, and with little expense or trouble, into the hands of those
who hold the ownership of the land, with the single deduction of the
remuneration due to the usufructuaries or farmers.
Read
the whole letter
Rev. A. C. Auchmuty: Gems from George, a
themed collection of
excerpts from the writings of Henry George (with links to sources)
NATURE acknowledges no ownership or control in man save as the result of
exertion. In no other way can her treasures be drawn forth, her powers directed,
or her forces utilized or controlled. She makes no discriminations among
men, but is to all absolutely impartial. She knows no distinction between
master and slave, king and subject, saint and sinner. All men to her stand
upon an equal footing and have equal rights. She recognizes no claim but
that of labor, and recognizes that without respect to the claimant. If a
pirate spread his sails, the wind will fill them as well as it will fill
those of a peaceful merchantman or missionary bark; if a king and a common
man be thrown overboard, neither can keep his head above the water except
by swimming; birds will not come to be shot by the proprietor of the soil
any quicker than they will come to be shot by the poacher; fish will bite
or will not bite at a hook in utter disregard as to whether it is offered
them by a good little boy who goes to Sunday school, or a bad little boy
who plays truant; grain will grow only as the ground is prepared and the
seed is sown; it is only at the call of labor that ore can be raised from
the mine; the sun shines and the rain falls alike upon just and unjust. The
laws of nature are the decrees of the Creator. There is written in them no
recognition of any right save that of labor; and in them is written broadly
and clearly the equal right of all men to the use and enjoyment of nature;
to apply to her by their exertions, and to receive and possess her reward.
Hence, as nature gives only to labor, the exertion of labor in production
is the only title to exclusive possession. — Progress & Poverty — Book
VII, Chapter 1, Justice of the Remedy: Injustice of private property in land
PRIVATE property is not of one species, and moral sanction can no more be
asserted universally of it than of marriage. That proper marriage conforms
to the law of God does not justify the polygamic or polyandric or incestuous
marriages that are in some countries permitted by the civil law. And as there
may be immoral marriage, so may there be immoral private property. — The
Condition of Labor, an Open Letter to Pope Leo XIII
THAT any species of property is permitted by the State, does not of itself
give it moral sanction. The State has often made things property that are not
justly property but involve violence and robbery. — The
Condition of Labor, an Open Letter to Pope Leo XIII
TO attach to things created by God the same right of private ownership that
justly attaches to things produced by labor, is to impair and deny the true
rights of property. For a man, who out of the proceeds of his labor is obliged
to pay another man for the use of ocean or air or sunshine or soil, all of
which are to men involved in the single term land, is in this deprived of his
rightful property, and thus robbed. — The
Condition of Labor, an Open Letter to Pope Leo XIII
HOW then is it that we are called deniers of the right of property? It is for
the same reason that caused nine-tenths of the good people in the United
States, north as well as south, to regard abolitionists as deniers of the right
of property; the same reason that made even John Wesley look on a smuggler
as a kind of robber, and on a custom-house seizer of other men's goods as a
defender of law and order. Where violations of the right of property
have been long sanctioned by custom and law, it is inevitable that those
who really assert the right of property will at first be thought to deny it. For
under such circumstances the idea of property becomes confused, and that is
thought to be property which is in reality a violation of property. — A
Perplexed Philosopher (The
Right Of Property And The Right Of Taxation)
LANDLORDS must elect to try their case either by human law or by moral law. If
they say that land is rightly property because made so by human law, they cannot
charge those who would change that law with advocating robbery. But if
they charge that such change in human law would be robbery, then they must
show that land is rightfully property irrespective of human law. — The
Reduction to Iniquity (a reply to the Duke of Argyll), The Nineteenth
Century, July, 1884
... go to "Gems from George"
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894) — Appendix:
FAQ
Q32. Is not ownership of land necessary to induce its improvement? Does
not history show that private ownership is a step in advance of common
ownership?
A. No. Private use was doubtless a step in advance of common use. And because
private use seems to us to have been brought about under the institution of private
ownership, private ownership appears to the superficial to have been the real
advance. But a little observation and reflection will remove that impression.
Private ownership of land is not necessary to its private use. And so far from
inducing improvement, private ownership retards it. When a man owns land he may
accumulate wealth by doing nothing with the land, simply allowing the community
to increase its value while he pays a merely nominal tax, upon the plea that
he gets no income from the property. But when the possessor has to pay the value
of his land every year, as he would have to under the single tax, and as ground
renters do now, he must improve his holding in order to profit by it. Private
possession of land, without profit except from use, promotes improvement; private
ownership, with profit regardless of use, retards improvement. Every city in
the world, in its vacant lots, offers proof of the statement. It is the lots
that are owned, and not those that are held upon ground-lease, that remain vacant.
Q53. Is it true that men are equally entitled to land? Are they not entitled
to it in proportion to their use of it?
A. Yes, they are entitled to it in proportion to their use of it and it is
this title that the single tax would secure. It would allow every one to
possess as much land as he wished, upon the sole condition that if it has
a value he shall account to the community for that value and for nothing
else; all that he produces from the land above its value being absolutely
his, free even from taxation. The single tax is the method best adapted to
our circumstances, and to orderly conditions, for limiting possession of
land to its use. By making it unprofitable to hold land except for use, or
to hold more than can be used to advantage, it constitutes every man his
own judge of the amount and the character of the land that he can use.... read the book
Charles B. Fillebrown: A Catechism
of Natural Taxation, from Principles of
Natural Taxation (1917)
Q3. What is meant by economic rent?
A. Gross ground rent -- the annual site value of land -- what land, including
any quality or content of the land itself, is worth annually for use -- what
the land does or would command for use per annum if offered in open market
-- the annual value of the exclusive use in control of a given area of land,
involving the enjoyment of those "rights and privileges thereto pertaining" which
are stipulated in every title deed, and which, enumerated specifically, are
as follows: right and ease of access to
* water, and
* health inspection,
* sewerage,
* fire protection,
* police,
* schools,
* libraries,
* museums,
* parks,
* playgrounds,
* steam and electric railway service,
* gas and electric lighting,
* telegraph and telephone service,
* subways,
* ferries,
* churches,
* public schools,
* private schools,
* colleges,
* universities,
* public buildings --
utilities which depend for their efficiency and economy on the character
of the government; which collectively constitute the economic and social
advantages of the land which are due to the presence and activity of population,
and are inseparable therefrom, including the benefit of proximity to, and
command of, facilities for commerce and communication with the world -- an
artificial value created primarily through public expenditure of taxes. For
the sake of brevity, the substance of this definition may be conveniently
expressed as the value of "proximity." It is ordinarily measured
by interest on investment plus taxes.
Q50. How could the landowner escape the alleged burden of an increase
in his land tax?
A. Simply by assuming the legitimate role of a model landlord, by putting his
land to suitable use, in providing for tenants at lowest possible price the best
accommodations and facilities appropriate to the situation that money can buy.
Q58. What expected result of the single tax needs studious emphasis?
A. That it would unlock the land to labor at its present value for use, instead
of locking out labor from the land by a prohibitive price based upon the future
value for use. ... read the whole article
Thomas Jefferson:
William F. Buckley, Jr. Henry
George and the Single Tax (on C-SPAN's Book Notes)
John Locke: "The earth belongs in usufruct to the living
and is given as a common stock for
men to live and Labor on."
a synopsis of Robert V. Andelson and James M. Dawsey: From
Wasteland to Promised land:
Liberation Theology for a Post-Marxist World
By equalizing opportunity,
political and economic liberation tend to draw both poor and rich into
the middle class. As an expression of social justice, this constitutes
a genuine advance, ethical as well as material. But it is no easy
guarantee of spiritual gain.conscientization" (roughly,
consciousness-raising through social commitment), emphasized and
refined by liberation theology, must continue although in a different
vein. The Kingdom of God will flourish only when outward liberation
gives rise to inward liberation, a victory over the limitations of the
bourgeois ethos.
"The Earth Is the Lord's" (Psalm 24:1). This statement tells us
something about God. He is attached to the land and loves it. He is not
a spiritual abstraction oblivious to the Wasteland in which we live.
God is the maker of the world of eating and sleeping, working and
begetting. It also tells us something of our place in this world. With God as the true owner of the earth,
every person has a right to the produce which equitable usufruct yields to his or
her efforts.
Middle-class traits include virtues such as industry, thrift,
restraint, commercial and professional rectitude, but, on the other
hand, low prudentialism, self-satisfaction, and an inclination to
regard material well-being as a sign of righteousness. Hence, even in
the Promised Land, what Paulo Freire calls " To recognize that "the
earth is the Lord's" is to see that the same God who established
communities has also in his providence ordained for them, through the
land itself, a just source of revenue. Yet, in the Wasteland in which
we live, this revenue goes mainly into the pockets of monopolists,
while communities meet their needs by extorting individuals the fruits
of their honest toil. If ever there were any doubt that structural sin
exists, our present system of taxation is the proof. Everywhere we see
governments penalizing individuals for their industry and creativity,
while the socially produced value of land is reaped by speculators in
exact proportion to the land which they withhold. The greater the
Wasteland, the greater the reward. Does this comport with any divine
plan, or notion of justice and human rights? Or does it not, rather,
perpetuate the Wasteland and prevent the realization of the Promised
Land?
This not meant to suggest that
land monopolists and speculators have a corner on acquisitiveness or
the "profit motive," which is a well-nigh universal fact of human
nature. As a group, they are no more sinful than are people at large,
except to the degree that they knowingly obstruct reforms aimed at
removing the basis of exploitation. Many abide by the dictum: "If one
has to live under a corrupt system, it is better to be a beneficiary
than a victim of it."
But they do not have to live
under a corrupt system; no one does. The profit motive can be channeled
in ways that are socially desirable as well as in ways that are
socially destructive. Let us give testimony to our faith that the earth
is the Lord's by building a social order in which there are no
victims. Read the whole synopsis
Bill Batt: How Our Towns Got That
Way (1996 speech)
... Rutgers Professor of Urban
Planning Donald Krueckeberg more
recently explained how real property became for the first time a
"commodity," much as the market gives personal property exchange
value. Native Americans tied the concept of property not to ownership
but to use. "One used it, one moved on, and use was shared with
others." But the colonists took their notion of real property from
evolving British legal tradition, defined largely in terms of what
its owners could subdue and control against challengers. John Locke's
conception of property was, in one sense, more akin to the Indian
notion in as much as one owned it only to the extent that one "mixed
one's labor" with it.
Indeed the most widespread notion
of property ownership,
especially in realms where Roman law had left no legacy, was title in
usufruct, meaning title to use. But that meaning has gradually
given way to the prevailing conception of title in fee simple, even
though legal constraints have grown to curtail abuses of such
ownership and are even seen sometimes as assaults on it. Krueckeberg
notes that as many as nine kinds of property rights have been
distinguished:
- possession,
- use,
- alienation (the power to give away),
- consumption,
- modification,
- destruction,
- management,
- exchange, and ... read
the whole article
Bill Batt: The
Compatibility of Georgist Economics and Ecological Economics
Georgists'
assumptions
about property ownership rest upon premises
profoundly different from their conventional use in western society —
indeed increasingly in world society. In the discourse of legal
philosophy, the notion of property and ownership are better understood
as a collection of legal rights and responsibilities among people; for
example, the right to possess, to use, to capitalize, to manage, and to
retain the income from such.18 If
one disaggregates these rights, one has a far clearer understanding of
the potential array of socio-economic arrangements that are possible.
The primary distinction to Georgists is that between ownership for use
and ownership for gain. More will be said about the merit of this
division at a later point, but it should be noted even here that the
distinction is ancient,19 and
has had expression at various times in human history long before the
appearance of Henry George. Two sets of contrasting terms are often
employed to distinguish the separate notions of ownership:
- leasehold versus freehold, or
- usufruct title versus fee-simple title.
In fact compensation for land held in usufruct was far more often in
kind than it was in money. Typically, in Middle Eastern as well as in
Asian societies, a percentage of a crop or of other products gained
from the land were accepted as just payment for its use, paid usually
to a king or nobleman in exchange for services which they in turn were
expected to provide. This usually meant the protection against ravaging
bands, arbitration of disputes, provision of sustenance in times of
emergency, and so on. The pattern of leasehold ownership with either
in-kind services, goods, or later fees paid to lords and kings is the
hallmark feature of feudalism, widely known not only in the European
past but throughout Asia and prehistoric Central American
civilizations.
In the Georgist context a
titleholder
has the right to ownership of land in usufruct, but not in fee simple.
As long as an owner uses land and other elements of nature in accord
with the rules and laws of society, one retains a possessory interest. That
interest extends to the privilege to use land for all purposes
consistent with its proper maintenance and care. It extends even in
some cases to the right to preclude others from any trespass at all. But what it typically does not include is
the right to any speculative gain that would follow from title in
freehold, or the right to use land beyond what it is capable of
sustaining. Use implies that its quality is not diminished for
the future availability of others, and that there is an obligation for
the user to pay to society a just price in exchange for such use. One
had no right, for example, to strip a forest of its trees. Enough is
known now about the arrangements of land ownership and use in
comparative perspective to assert with confidence that the historical
practice of title in fee simple or freehold has been far more the
exception than rule.20
Taking the long view of history, title in usufruct has been by far the
more common pattern of ownership of natural resources, except where
Roman jurisprudence and its offspring have spread throughout the world
and come to dominate. ...
The heart of George’s economics was, in a way, Biblical. As the
son of
a religious book publisher born in Philadelphia, he had adequate
opportunity to witness the early growth of the American republic in a
unique way. On his own in San Francisco and responsible for a wife and
child at a young age, his first effort at resolving the puzzles of
injustice were a manuscript printed in 1871. But only after additional
exposure to Ricardian rent theory was he able to refine his ideas such
that they could form the basis of his Progress
and Poverty eight years
later. His Christian roots led him to a deep commitment to the basic
moral equality of all people; his challenge was to find a way to ensure
that this equality was manifest in economic fairness.
As noted earlier, the starting point of Georgist philosophy is
that
nature belongs to owners only in usufruct
and not in freehold. Because
any monetary wealth that accrued to that nature stemmed directly from
the physical presence of people and was therefore social in character,
the resulting added increment of value that constituted rent belonged
in turn to the community that created it. Nature would have no economic
price without people. Hence rent was the community’s entitlement and
not that of individuals, and the land rent that accrued to parcels as a
result of social investment should be returned to — recaptured by — the
community. It was obvious to George
that the wealthiest people in the nation usually owed their fortune not
to the sweat of their brow or the inventiveness of their minds. Rather
their position was due to their success as land speculators, to an
increase in rent on land they had captured title to, land rightfully
belonging to all. The earth and all its product, he argued, was
the common heritage of humanity, a birthright of all people. ... read the whole article
see also Bill Batt: How the
Railroads Got Us On the Wrong Economic Track
Frank Stilwell and Kirrily Jordan: The
Political Economy of Land: Putting Henry George in His Place
Georgism has a distinctive ethical basis. So a review of the contemporary
relevance of Georgist political economy can usefully begin by making this
explicit. The key moral issue is the private appropriation of public wealth.
As George recognised, land is a ‘gift from nature’ and, as such,
is rightfully a community resource. Hence, those deriving benefits from the
private ownership of land should recompense the community for the privilege.
This principle has strong echoes of the idea of ‘usufruct’, a
pre-capitalist term denoting a person’s legal right to use and accrue
benefits from property that does not belong to them. In return, the user
is obliged to keep the property in good repair and pay all costs as a ‘ground
rent’ (‘Lectric Law Library, n.d). The concept of ‘usufruct’ has
fallen out of common usage, so one hesitates to try to revive it. Moreover,
as Richards (2002) notes, ‘it is difficult to image how this word could
be employed, or brought back into circulation, in the modern world, since
we live in a world in which people tend to be remarkably unsympathetic to
the property rights or claims of others’.
However, the principle of ‘usufruct’ goes to the heart of the
question of how best to balance collective and individual rights and interests.
George’s solution of a tax on the value of land squarely addresses
this issue. By returning a proportion of the land value to the community
in the form of taxation revenue, restitution would be paid for the use of
a community resource. This is an ethical justification for land taxation.
... read the whole article
Walter Rybeck and Ronald Pasquariello: Combating
Modern-day Feudalism: Land as God’s Gift
Private vs. common
property. We
utterly misunderstand the land issue unless we acknowledge the
distinction between the value of the land itself and the value of labor
on the land. The institution of private property has a sound foundation
-- the proposition that people have a right to the fruits of their
labor; that is, to the output of their mental and physical efforts. We
are not questioning the legitimacy of earnings that landholders or
others derive from buildings or production on the land. People who
build homes, factories or offices, or who produce various types of
goods and services, have a solid ethical claim to what they have
created. However, the land itself, as our biblical forbears realized,
does not meet this criterion. "The earth
is the Lord’s and the fullness
thereof" (Ps. 24:1).
God’s gift
of the land does not confer absolute
ownership. We are free to use it, enjoy it and benefit from it, but God
retains ownership. We serve as God’s caretakers, or tenants, on the
land. Jefferson recognized this gift, saying that land belonged in
usufruct -- in trust -- to the
living. Sir William Blackstone, the
preeminent authority on English law, wrote in his Commentaries: "The
earth and all things therein are the general property of all mankind,
from the gift of the creator."
This idea
of the land belonging to all humanity, to
the community as a whole, is not entirely inoperative today. National
parks, school grounds, public building sites, many wilderness areas,
lakes and ocean fronts are recognized as the common property of
all. ... Read
the whole article
Everett Gross: Explaining Rent
Sometimes it's difficult for people to understand the meaning of "rent" as
an economic concept. One way I have of explaining it doesn't use the
word rent. I just use a little analogy.
I'm from Crete, Nebraska. It's a small town of 5,000 people.
Suppose a man comes to Crete, and he wants to start a business. He
needs a building, but first he needs a piece of ground to build this new
building on. So he looks up a real estate agent, describes what he wants,
and the real
estate agent shows him a parcel that's just right for his needs. The man
asks the agent, "All right, now how much money do you want for this land?" The agent
says, "It's worth $50,000." The man says, "Why is it worth $50,000?" And the
real estate agent points out that "The school is good, the roads are good,
the police department is good, the rescue crew is good and very fast, and
business is good here."
So the man says "Yeah, I believe that $50,0000 is a fair price. I'll
take it. How do I pay the $50,000 to the school people, and the road people,
and the police department? To whom do I pay the $50,000?" And the real estate
agent says, "Oh no. You don't pay it to them. You pay it to the person
who owned the land before."
The man says, "But who supports the schools, and the roads, and the police,
and the other good things?" And the real estate agent says, "If you
build, then you'll pay for them again."
The buyer then asks, "And what will the previous owner do for me for
my $50,000?" The real estate man answers, "Nothing! Nothing
at all!"
Now I don't need to use the word "rent" in that explanation. ...read
the whole article, including Dave Wetzel's take on it
Henry George: The Condition of
Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
The darkness in light, the weakness in strength, the poverty amid wealth,
the seething discontent foreboding civil strife, that characterize our
civilization of today, are the natural, the inevitable results of our rejection
of God’s beneficence, of our ignoring of his intent. Were we on the
other hand to follow his clear, simple rule of right, leaving scrupulously
to the individual all that individual labor produces, and taking for the
community the value that attaches to land by the growth of the community
itself, not merely could evil modes of raising public revenues be dispensed
with, but all men would be placed on an equal level of opportunity with
regard to the bounty of their Creator, on an equal level of opportunity
to exert their labor and to enjoy its fruits. And then, without
drastic or restrictive measures the forestalling of land would cease. For
then
the possession of land would mean only security for the permanence of its
use, and there would be no object for any one to get land or to keep land
except for use; nor would his possession of better land than others had
confer any unjust advantage on him, or unjust deprivation on them, since
the equivalent of the advantage would be taken by the state for the benefit
of all. ...
Nor do we seek any “futile and ridiculous equality.” We recognize,
with you, that there must always be differences and inequalities. In so far
as these are in conformity with the moral law, in so far as they do not violate
the command, “Thou shalt not steal,” we are content. We do not
seek to better God’s work; we seek only to do his will. The equality
we would bring about is not the equality of fortune, but the equality of
natural opportunity; the equality that reason and religion alike proclaim — the
equality in usufruct of all his children to the bounty of Our Father who
art in Heaven. ... read the whole letter
Bill Batt: Comment on Parts of
the NYS Legislative Tax Study Commission's 1985 study “Who Pays New
York Taxes?”
Henry George’s Solution: Taxing the Flow of Land Rent
If land values are really the present values of anticipated future ground
rents, one can certainly treat them as flows rather than stocks, just as
community services are continuous flows. The amount of rent flowing through
a site and through the economy is not negligible; what estimates have been
made, where indeed the economic data allow it to be made, suggest that it
is roughly a third of a nation’s GDP.29 The question is whether it
makes more sense to. Should we elect to continue property tax regimes as
we do, it would make better sense to tax buildings as stocks and lands as
rent flows. But this raises the question whether real property should be
exempt from all taxes, as some have argued.30 What rationale exists for taxing
lands, whether as stocks or flows; and why do we tax buildings? I will argue
below that taxing buildings and the failure to adequately tax land both have
deleterious consequences for the whole economy.
Little justification exists for taxing buildings, or improvements of any
sort, so this question is easily disposed of. The practice is explained largely
as a matter of historical inertia. Only in the recent century or two have
buildings represented any significant capital value; prior to the rise of
major cities, the value of real property lay essentially in land. American
cities today typically record aggregate assessed land values – at least
when the valuations are well-done – at about 40% to 60% of total taxable
value, that is, of land and buildings taken together.31 Skyscrapers reflect
enormous capital investment, and this expenditure is warranted because of
the enormous value of locational sites. Each site gets its market price from
the fact that the total neighborhood context creates an attractive market
presence and ambience. By taxing buildings, however, we impose a penalty
on their optimum development as well as on the incentives for their maintenance.
Moreover, taxes on buildings take away from whatever burden would otherwise
be imposed on sites, with the result that incentives for their highest and
best use is weakened. Lastly, the technical and administrative challenges
of properly assessing the value of improvements is daunting, particularly
since they must be depreciated for tax and accounting purposes, evaluated
for potential replacement, and so on. In fact most costs associated with
administration of property taxation and appeal litigation involve disputes
over the valuation of structures, not land values.
Land value taxation, on the other hand, overcomes all these obstacles. Locations
are the beneficiaries of community services whether they are improved or
not. As has been forcefully argued by this writer and others elsewhere,32
a tax on land value conforms to all the textbook principles of sound tax
theory. Some further considerations are worth reviewing, however, when looking
at ground rent as a flow rather than as a “present value” stock.
The technical ability to trace changes in the market prices of sites – or
as can also be understood, the variable flow of ground rent to those sites – by
the application of GIS (geographic information systems) real-time recording
of sales transactions invites wholesale changes in the maintenance of cadastral
data. The transmittal of sales records as typically received in the offices
of local governments for purposes of title registration over to Assessors’ offices
allows for the possibility of a running real-time mapping of market values.
Given also that GIS algorithms can now calculate the land value proportions
reasonably accurately, this means that “landvaluescapes” are
easily created in ways analogous to maps that portray other common geographic
features. These landvaluescapes reflect the flow of ground rent through local
or regional economies, and can also be used to identify the areas of greatest
market vitality and enterprise. The flow of economic rent can easily be taxed
in ways that overcomes the mistaken notion that it is a stock. Just as income
is recognized as a flow of money, rent too can (and should) be understood
as such.
The question still begs to be answered, “why tax land?” And
what happens when we don’t tax land? Henry George answered this more
than a century ago more forcefully and clearly, perhaps, than anyone has
since. He recognized full well that the economic surplus not expended by
human hands or minds in the production of capital wealth gravitates to land.
Particular land sites come to reflect the value of their strategic location
for market exchanges by assuming a price for their monopoly use. Regardless
whether those who acquire title to such sites use them to the full extent
of their potential, the flow of rent to such locations is commensurate with
their full capacity. This is why John Stuart Mill more than a century ago
observed that, “Landlords grow richer in their sleep without working,
risking or economizing. The increase in the value of land, arising as it
does from the efforts of an entire community, should belong to the community
and not to the individual who might hold title.”33 Absent its recovery
by taxation this rent becomes a “free lunch” to opportunistically
situated titleholders. When offered for sale, the projected rental value
is capitalized in the present value for purposes of attaching a market price
and sold as a commodity. Yet simple justice calls for the recovery in taxes
what is the community’s creation. Moreover, the failure to recover
the land rent connected to sites makes it necessary to tax productive activities
in our economy, and this leads to economic and technical inefficiency known
as “deadweight loss.”34 It means that the economy performs suboptimally.
Land, and by this Henry George meant any natural factor of production not
created by human hands or minds, is ours only to use, not to buy or sell
as a commodity. In the equally immortal words of Jefferson a century earlier, “The
earth belongs in usufruct to the living; . . . [It is] given as a common
stock for men to labor and live on.”35 This passage likely needs a
bit of parsing for the modern reader. The word usufruct, understood since
Roman times, has almost passed from use today. It means “the right
to use the property of another so long as its value is not diminished.”36
Note also that Jefferson regarded the earth as a “common stock;” not
allotted to individuals with possessory titles. Only the phrase “to
the living” might be subject to challenge by forward-looking environmentalists
who, taking an idea from Native American cultures, argue that “we do
not inherit the earth from our ancestors; we borrow it from our children.” The
presumption that real property titles are acquired legitimately is a claim
that does not withstand scrutiny; rather all such titles owe their origin
ultimately to force or fraud.37
If we own the land sites that we occupy only in usufruct, and the rent that
derives from those sites is due to community enterprise, it is not a large
logical leap to argue that the community’s recovery of that rent should
be the proper source of taxation. This is the Georgist argument: that the
recapture of land rent is the proper – indeed the natural – source
of taxation.38 ... read the whole
commentary
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