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Man as an Intellectual and Spiritual Creature

 


Henry George: The Condition of Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)

We hold: That—

This world is the creation of God.

The men brought into it for the brief period of their earthly lives are the equal creatures of his bounty, the equal subjects of his provident care.

By his constitution man is beset by physical wants, on the satisfaction of which depend not only the maintenance of his physical life but also the development of his intellectual and spiritual life.

God has made the satisfaction of these wants dependent on man’s own exertions, giving him the power and laying on him the injunction to labor — a power that of itself raises him far above the brute, since we may reverently say that it enables him to become as it were a helper in the creative work.

God has not put on man the task of making bricks without straw. With the need for labor and the power to labor he has also given to man the material for labor. This material is land — man physically being a land animal, who can live only on and from land, and can use other elements, such as air, sunshine and water, only by the use of land.

Being the equal creatures of the Creator, equally entitled under his providence to live their lives and satisfy their needs, men are equally entitled to the use of land, and any adjustment that denies this equal use of land is morally wrong. ...

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? ...

See how fully and how beautifully Christ’s life on earth illustrated this law. Entering our earthly life in the weakness of infancy, as it is appointed that all should enter it, he lovingly took what in the natural order is lovingly rendered, the sustenance, secured by labor, that one generation owes to its immediate successors. Arrived at maturity, he earned his own subsistence by that common labor in which the majority of men must and do earn it. Then passing to a higher — to the very highest — sphere of labor, he earned his subsistence by the teaching of moral and spiritual truths, receiving its material wages in the love-offerings of grateful hearers, and not refusing the costly spikenard with which Mary anointed his feet. So, when he chose his disciples, he did not go to landowners or other monopolists who live on the labor of others, but to common laboring-men. And when he called them to a higher sphere of labor and sent them out to teach moral and spiritual truths, he told them to take, without condescension on the one hand or sense of degradation on the other, the loving return for such labor, saying to them that “the laborer is worthy of his hire,” thus showing, what we hold, that all labor does not consist in what is called manual labor, but that whoever helps to add to the material, intellectual, moral or spiritual fullness of life is also a laborer.*

* Nor should it be forgotten that the investigator, the philosopher, the teacher, the artist, the poet, the priest, though not engaged in the production of wealth, are not only engaged in the production of utilities and satisfactions to which the production of wealth is only a means, but by acquiring and diffusing knowledge, stimulating mental powers and elevating the moral sense, may greatly increase the ability to produce wealth. For man does not live by bread alone. . . . He who by any exertion of mind or body adds to the aggregate of enjoyable wealth, increases the sum of human knowledge, or gives to human life higher elevation or greater fullness — he is, in the large meaning of the words, a “producer,” a “working-man,” a “laborer,” and is honestly earning honest wages. But he who without doing aught to make mankind richer, wiser, better, happier, lives on the toil of others — he, no matter by what name of honor he may be called, or how lustily the priests of Mammon may swing their censers before him, is in the last analysis but a beggar-man or a thief. Protection or Free Trade, pp. 74-75.

In assuming that laborers, even ordinary manual laborers, are naturally poor, you ignore the fact that labor is the producer of wealth, and attribute to the natural law of the Creator an injustice that comes from man’s impious violation of his benevolent intention. In the rudest stage of the arts it is possible, where justice prevails, for all well men to earn a living. With the labor-saving appliances of our time, it should be possible for all to earn much more. And so, in saying that poverty is no disgrace, you convey an unreasonable implication. For poverty ought to be a disgrace, since in a condition of social justice, it would, where unsought from religious motives or unimposed by unavoidable misfortune, imply recklessness or laziness.

The sympathy of your Holiness seems exclusively directed to the poor, the workers. Ought this to be so? Are not the rich, the idlers, to be pitied also? By the word of the gospel it is the rich rather than the poor who call for pity, for the presumption is that they will share the fate of Dives. And to any one who believes in a future life the condition of him who wakes to find his cherished millions left behind must seem pitiful. But even in this life, how really pitiable are the rich. The evil is not in wealth in itself — in its command over material things; it is in the possession of wealth while others are steeped in poverty; in being raised above touch with the life of humanity, from its work and its struggles, its hopes and its fears, and above all, from the love that sweetens life, and the kindly sympathies and generous acts that strengthen faith in man and trust in God.

Consider how the rich see the meaner side of human nature; how they are surrounded by flatterers and sycophants; how they find ready instruments not only to gratify vicious impulses, but to prompt and stimulate them; how they must constantly be on guard lest they be swindled; how often they must suspect an ulterior motive behind kindly deed or friendly word; how if they try to be generous they are beset by shameless beggars and scheming impostors; how often the family affections are chilled for them, and their deaths anticipated with the ill-concealed joy of expectant possession. The worst evil of poverty is not in the want of material things, but in the stunting and distortion of the higher qualities. So, though in another way, the possession of unearned wealth likewise stunts and distorts what is noblest in man.

God’s commands cannot be evaded with impunity. If it be God’s command that men shall earn their bread by labor, the idle rich must suffer. And they do. See the utter vacancy of the lives of those who live for pleasure; see the loathsome vices bred in a class who surrounded by poverty are sated with wealth. See that terrible punishment of ennui, of which the poor know so little that they cannot understand it; see the pessimism that grows among the wealthy classes — that shuts out God, that despises men, that deems existence in itself an evil, and fearing death yet longs for annihilation.

When Christ told the rich young man who sought him to sell all he had and to give it to the poor, he was not thinking of the poor, but of the young man. And I doubt not that among the rich, and especially among the self-made rich, there are many who at times at least feel keenly the folly of their riches and fear for the dangers and temptations to which these expose their children. But the strength of long habit, the prompting of pride, the excitement of making and holding what have become for them the counters in a game of cards, the family expectations that have assumed the character of rights, and the real difficulty they find in making any good use of their wealth, bind them to their burden, like a weary donkey to his pack, till they stumble on the precipice that bounds this life.

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