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.
... read the whole letter