A, B and C

Nothing can be clearer than the proposition that the failure of wages to increase with increasing productive power is due to the increase of rent.

Three things unite to production — labor, capital, and land.

Three parties divide the produce — the laborer, the capitalist and the landowner.

If, with an increase in production the laborer gets no more and the capitalist no more, it is a necessary inference that the landlowner reaps the whole gain.

And the facts agree with the inference. Though neither wages not interest anywhere increae as material progress goes on, yet the invariable accompaniment and mark of material progress is the increase of rent — the rise of land values.

The increase of rent explains why wages and interest do not increase. The cause which give to the landholder is the cause which denies to the laborer and the capitalists.

Henry George, Progress & Poverty, p. 222 (The Laws of Distribution)

Mason Gaffney (correspondence, May, 2006)

Seems to me that a “right” is something everyone should have, like life, liberty, free speech, rewards of working and saving. A privilege is something A can only have by depriving B et al. Those with privileges have sought to expand the meaning of “right” to include their privileges.

Ambrose Bierce (1842—1914), American satirist, The Devil's Dictionary:

"LAND, n. A part of the earth's surface, considered as property. The theory that land is property subject to private ownership and control is the foundation of modern society, and is eminently worthy of the superstructure. Carried to its logical conclusion, it means that some have the right to prevent others from living; for the right to own implies the right exclusively to occupy; and in fact laws of trespass are enacted wherever property in land is recognised. It follows that if the whole area of terra firma is owned by A, B and C, there will be no place for D, E, F and G to be born, or, born as trespassers, to exist."

Thomas Flavin, writing in The Iconoclast, 1897

Now, it is quite true that all taxes of whatever nature are paid out of the products of labor. But must they be for that reason a tax on labor products. Let us see.

I suppose you won't deny that a unit of labor applies to different kinds of land will give very different results. Suppose that a unit of labor produces on A's land 4, on B's 3, on C's 2 and on D's 1. A's land is the most, and D's is the least, productive land in use in the community to which they belong. B's and C's represent intermediate grades. Suppose each occupies the best land that was open to him when he entered into possession. Now, B, and C, and D have just as good a right to the use of the best land as A had.

Manifestly then, if this be the whole story, there cannot be equality of opportunity where a unit of labor produces such different results, all other things being equal except the land.

How is this equality to be secured? There is but one possible way. Each must surrender for the common use of all, himself included, whatever advantages accrues to him from the possession of land superior to that which falls to the lot of him who occupies the poorest.

In the case stated, what the unit of labor produces for D, is what it should produce for A, B and C, if these are not to have an advantage of natural opportunity over D.

Hence equity is secured when A pays 3, B, 2 and C, 1 into a common fund for the common use of all — to be expended, say in digging a well, making a road or bridge, building a school, or other public utility.

Is it not manifest that here the tax which A, B and C pay into a common fund, and from which D is exempt, is not a tax on their labor products (though paid out of them) but a tax on the superior advantage which they enjoy over D, and to which D has just as good a right as any of them.

The result of this arrangement is that each takes up as much of the best land open to him as he can put to gainful use, and what he cannot so use he leaves open for the next. Moreover, he is at no disadvantage with the rest who have come in ahead of him, for they provide for him, in proportion to their respective advantages, those public utilities which invariably arise wherever men live in communities. Of course he will in turn hold to those who come later the same relation that those who came earlier held to him.

Suppose now that taxes had been levied on labor products instead of land; all that any land-holder would have to do to avoid the tax is to produce little or nothing. He could just squat on his land, neither using it himself nor letting others use it, but he would not stop at this, for he would grab to the last acre all that he could possibly get hold of. Each of the others would do the same in turn, with the sure result that by and by, E, F and G would find no land left for them on which they might make a living.

So they would have to hire their labor to those who had already monopolized the land, or else buy or rent a piece of land from them. Behold now the devil of landlordism getting his hoof on God's handiwork! Exit justice, freedom, social peace and plenty. Enter robbery, slavery, social discontent, consuming grief, riotous but unearned wealth, degrading pauperism, crime breeding, want, the beggar's whine, and the tyrant's iron heel.

And how did it all come about? By the simple expedient of taxing labor products in order that precious landlordism might laugh and grow fat on the bovine stupidity of the community that contributes its own land values toward its own enslavement!

And yet men vacuously ask, "What difference does it make?"

O tempora! O mores! To be as plain as is necessary, it makes this four-fold difference.

• First, it robs the community of its land values;
• second, it robs labor of its wages in the name of taxation;
• third, it sustains and fosters landlordism, a most conspicuously damnable difference;
• fourth, it exhibits willing workers in enforced idleness; beholding their families in want on the one hand, and unused land that would yield them abundance on the other.

This last is a difference that cries to heaven for vengeance, and if it does not always cry in vain, will W. C. Brann be able to draw his robe close around him and with a good conscience exclaim, "It's none of my fault; I am not my brother's keeper."

"There are only three ways by which any individual can get wealth — by work, by gift or by theft. And, clearly, the reason why the workers get so little is that the beggars and thieves get so much. When a man gets wealth that he does not produce, he necessarily gets it at the expense of those who produce it." — Henry George

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

Note 91: The labor that was forced to the poorest lands would continually bid for the opportunities that the better lands offered, until an equilibrium was reached at the point shown in the preceding chart, where the given expenditure of labor is as well compensated in one place as in another.

If laborer and land-owner be different persons, the laborer receives what is distinguished as Wages, and the land-owner what is distinguished as Rent. If the same person, he receives Wages as laborer and Rent as land-owner. ... read the book

Rev. A. C. Auchmuty: Gems from George, a themed collection of excerpts from the writings of Henry George (with links to sources)

CAPITAL, which is not in itself a distinguishable element, but which it must always be kept in mind consists of wealth applied to the aid of labor in further production, is not a primary factor. There can be production without it, and there must have been production without it, or it could not in the first place have appeared. It is a secondary and compound factor, coming after and resulting from the union of labor and land in the production of wealth. It is in essence labor raised by a second union with land to a third or higher power. But it is to civilized life so necessary and important as to be rightfully accorded in political economy the place of a third factor in production. — The Science of Political Economy unabridged: Book III, Chapter 17, The Production of Wealth: The Third Factor of Production — Capital • abridged: Part III, Chapter 10: Order of the Three Factors of Production

IT is to be observed that capital of itself can do nothing. It is always a subsidiary, never an initiatory, factor. The initiatory factor is always labor. That is to say, in the production of wealth labor always uses capital, is never used by capital. This is not merely literally true, when by the term capital we mean the thing capital. It is also true when we personify the term and mean by it not the thing capital, but the men who are possessed of capital. The capitalist pure and simple, the man who merely controls capital, has in his hands the power of assisting labor to produce. But purely as capitalist he cannot exercise that power. It can be exercised only by labor. To utilize it he must himself exercise at least some of the functions of labor, or he must put his capital, on some terms, at the use of those who do. — The Science of Political Economy unabridged: Book III, Chapter 17, The Production of Wealth: The Third Factor of Production — Capital • abridged: Part III, Chapter 10: Order of the Three Factors of Production

THUS we must exclude from the category of capital everything that may be included either as land or labor. Doing so, there remain only things which are neither land nor labor, but which have resulted from the union of these two original factors of production. Nothing can be properly capital that does not consist of these — that is to say, nothing can be capital that is not wealth. — Progress & Poverty — Book I, Chapter 2: Wages and Capital: The Meaning of the Terms

THUS, a government bond is not capital, nor yet is it the representative of capital. The capital that was once received for it by the government has been consumed unproductively — blown away from the mouths of cannon, used up in war ships, expended in keeping men marching and drilling, killing and destroying. The bond cannot represent capital that has been destroyed. It does not represent capital at all. It is simply a solemn declaration that the government will, some time or other, take by taxation from the then existing stock of the people, so much wealth, which it will turn over to the holder of the bond; and that, in the meanwhile, it will, from time to time, take, in the same way, enough to make up to the holder the increase which so much capital as it some day promises to give him would yield him were it actually in his possession. The immense sums which are thus taken from the produce of every modern country to pay interest on public debts are not the earnings or increase of capital — are not really interest in the strict sense of the term, but are taxes levied on the produce of labor and capital, leaving so much less for wages and so much less for real interest. — Progress & Poverty — Book III, Chapter 4: The Laws of Distribution: Of Spurious Capital and of Profits Often Mistaken For Interest

CAPITAL, as we have seen, consists of wealth used for the procurement of more wealth, as distinguished from wealth used for the direct satisfaction of desire; or, as I think it may be defined, of wealth in the course of exchange.

Capital, therefore, increases the power of labor to produce wealth: (1) By enabling labor to apply itself in more effective ways, as by digging up clams with a spade instead of the hand, or moving a vessel by shoveling coal into a furnace, instead of tugging at an oar. (2) By enabling labor to avail itself of the reproductive forces of nature, as to obtain corn by sowing it, or animals by breeding them. (3) By permitting the division of labor, and thus, on the one hand, increasing the efficiency of the human factor of wealth, by the utilization of special capabilities, the acquisition of skill, and the reduction of waste; and, on the other, calling in the powers of the natural factor at their highest, by taking advantage of the diversities of soil, climate and situation, so as to obtain each particular species of wealth where nature is most favorable to its production.

Capital does not supply the materials which labor works up into wealth, as is erroneously taught; the materials of wealth are supplied by nature. But such materials partially worked up and in the course of exchange are capital. — Progress & Poverty — Book I, Chapter 5: Wages and Capital: The Real Functions of Capital

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