Your use, in so many passages of your Encyclical, of the inclusive term “property” or “private” property,
of which in morals nothing can be either affirmed or denied, makes your meaning,
if we take isolated sentences, in many places ambiguous. But reading it as
a whole, there can be no doubt of your intention that private property in
land shall be understood when you speak merely of private property. With
this interpretation, I find that the reasons you urge for private property
in land are eight. Let us consider them in order of presentation. You urge:
1. That what is bought with rightful property is rightful property. (RN,
paragraph 5) ...
2. That private property in land proceeds from man’s gift of reason.
(RN, paragraphs 6-7.) ...
3. That private property in land deprives no one of the use of land. (RN,
paragraph 8.) ...
4. That Industry expended on land gives ownership in the land itself. (RN,
paragraphs 9-10.) ...
5. That private property in land has the support of the common opinion of
mankind, and has conduced to peace and tranquillity, and that it is sanctioned
by Divine Law. (RN, paragraph 11.) ...
6. That fathers should provide for their children and that private property
in land is necessary to enable them to do so. (RN, paragraphs 14-17.) ...
7. That the private ownership of land stimulates industry, increases wealth,
and attaches men to the soil and to their country. (RN, paragraph 51.) ...
8. That the right to possess private property in land is from nature, not
from man; that the state has no right to abolish it, and that to take the
value of landownership in taxation would be unjust and cruel to the private
owner. (RN, paragraph 51.)
2. That private property in land proceeds from man’s gift of reason.
In the second place your Holiness argues that man possessing reason and
forethought may not only acquire ownership of the fruits of the earth, but
also of the earth itself, so that out of its products he may make provision
for the future.
Reason, with its attendant forethought, is indeed the distinguishing attribute
of man; that which raises him above the brute, and shows, as the Scriptures
declare, that he is created in the likeness of God. And this gift of reason
does, as your Holiness points out, involve the need and right of private
property in whatever is produced by the exertion of reason and its attendant
forethought, as well as in what is produced by physical labor. In truth,
these elements of man’s production are inseparable, and labor involves
the use of reason. It is by his reason that man differs from the animals
in being a producer, and in this sense a maker. Of themselves his physical
powers are slight, forming as it were but the connection by which the mind
takes hold of material things, so as to utilize to its will the matter and
forces of nature. It is mind, the intelligent reason, that is the prime mover
in labor, the essential agent in production.
The right of private ownership does therefore indisputably attach to things
provided by man’s reason and forethought. But it cannot attach to things
provided by the reason and forethought of God!
To illustrate: Let us suppose a company traveling through the desert as
the Israelites traveled from Egypt. Such of them as had the forethought to
provide themselves with vessels of water would acquire a just right of property
in the water so carried, and in the thirst of the waterless desert those
who had neglected to provide themselves, though they might ask water from
the provident in charity, could not demand it in right. For while water itself
is of the providence of God, the presence of this water in such vessels,
at such place, results from the providence of the men who carried it. Thus
they have to it an exclusive right.
But suppose others use their forethought in pushing ahead and appropriating
the springs, refusing when their fellows come up to let them drink of the
water save as they buy it of them. Would such forethought give any right?
Your Holiness, it is not the forethought of carrying water where it is needed,
but the forethought of seizing springs, that you seek to defend in defending
the private ownership of land!
Let me show this more fully, since it may be worth while to meet those who
say that if private property in land be not just, then private property in
the products of labor is not just, as the material of these products is taken
from land. It will be seen on consideration that all of man’s production
is analogous to such transportation of water as we have supposed. In growing
grain, or smelting metals, or building houses, or weaving cloth, or doing
any of the things that constitute producing, all that man does is to change
in place or form preexisting matter. As a producer man is merely a changer,
not a creator; God alone creates. And since the changes in which man’s
production consists inhere in matter so long as they persist, the right of
private ownership attaches the accident to the essence, and gives the right
of ownership in that natural material in which the labor of production is
embodied. Thus water, which in its original form and place is the common
gift of God to all men, when drawn from its natural reservoir and brought
into the desert, passes rightfully into the ownership of the individual who
by changing its place has produced it there.
But such right of ownership is in reality a mere right of temporary possession.
For though man may take material from the storehouse of nature and change
it in place or form to suit his desires, yet from the moment he takes it,
it tends back to that storehouse again. Wood decays, iron rusts, stone disintegrates
and is displaced, while of more perishable products, some will last for only
a few months, others for only a few days, and some disappear immediately
on use. Though, so far as we can see, matter is eternal and force forever
persists; though we can neither annihilate nor create the tiniest mote that
floats in a sunbeam or the faintest impulse that stirs a leaf, yet in the
ceaseless flux of nature, man’s work of moving and combining constantly
passes away. Thus the recognition of the ownership of what natural material
is embodied in the products of man never constitutes more than temporary
possession — never interferes with the reservoir provided for all.
As taking water from one place and carrying it to another place by no means
lessens the store of water, since whether it is drunk or spilled or left
to evaporate, it must return again to the natural reservoirs — so is
it with all things on which man in production can lay the impress of his
Hence, when you say that man’s reason puts it within his right to
have in stable and permanent possession not only things that perish in the
using, but also those that remain for use in the future, you are right in
so far as you may include such things as buildings, which with repair will
last for generations, with such things as food or fire-wood, which are destroyed
in the use. But when you infer that man can have private ownership in those
permanent things of nature that are the reservoirs from which all must draw,
you are clearly wrong. Man may indeed hold in private ownership the fruits
of the earth produced by his labor, since they lose in time the impress of
that labor, and pass again into the natural reservoirs from which they were
taken, and thus the ownership of them by one works no injury to others. But
he cannot so own the earth itself, for that is the reservoir from which must
constantly be drawn not only the material with which alone men can produce,
but even their very bodies.
The conclusive reason why man cannot claim ownership in the earth itself
as he can in the fruits that he by labor brings forth from it, is in the
facts stated by you in the very next paragraph (7), when you truly say:
Man’s needs do not die out, but recur; satisfied today, they demand
new supplies tomorrow. Nature, therefore, owes to man a storehouse that shall
never fail, the daily supply of his daily wants. And this he finds only in
the inexhaustible fertility of the earth.
By man you mean all men. Can what nature owes to all men be made the private
property of some men, from which they may debar all other men?
Let me dwell on the words of your Holiness, “Nature, therefore, owes
to man a storehouse that shall never fail.” By Nature you mean God.
Thus your thought, that in creating us, God himself has incurred an obligation
to provide us with a storehouse that shall never fail, is the same as is
thus expressed and carried to its irresistible conclusion by the Bishop
God was perfectly free in the act by which He created us; but having created
us he bound himself by that act to provide us with the means necessary
for our subsistence. The land is the only source of this kind now known
The land, therefore, of every country is the common property of the people
of that country, because its real owner, the Creator who made it, has
transferred it as a voluntary gift to them. “Terram autem dedit filiis hominum.” Now,
as every individual in that country is a creature and child of God, and
as all his creatures are equal in his sight, any settlement of the land
country that would exclude the humblest man in that country from his
share of the common inheritance would be not only an injustice and a wrong
man, but, moreover, be AN IMPIOUS RESISTANCE TO THE BENEVOLENT INTENTIONS
OF HIS CREATOR.
... read the whole letter
A Deeper Examination of the Property Taxation Quagmire
This last caveat suggests what is likely the most critical failing of the
Report. The use of an income snapshot as the basis for measuring the effective
tax burden on owners of real property reflects a misunderstanding of how
tax equity should be construed. The value of property titles is a measure
of wealth, and is likely to have little if any bearing on any momentary snapshot
of income in a household. This confusion lies at the very core of difficulties
in assessing the fairness of the property tax. Several studies of tax equity
involving the real property tax fail to recognize that they are using income
as a benchmark for analysis, even while the tax is upon wealth.
The problem as I see it is the mixing of two separate dimensions of economic
value – what are frequently referred to as stock and flow. Stock value
is a variable that has no time dimension, e.g., the stock of capital, or
what in real estate is typically understood as the market price of a parcel.19
Flow, by contrast, is the quantity of an economic variable measured over
a period of time. So the flow of an investment may be measured as the amount
of investment expenditure or the amount of income return in a given time,
such as in a yearly period.20 We can easily understand stock when looking
at the value of a house or an office building just as we can for a car or
a computer, as it represents the investment of labor and capital, and can
be priced based on market supply and demand, depreciation, and replacement
value much as with any other manufactured good.
The other component of a real property parcel is the land value, which reflects
a market price based on very different criteria. Despite the apparent reality
that land is visible and tangible, land prices reflect the value of location
more than they do the material content they contain. This is easy to understand
when one reflects that if some earth is removed from a site and brought to
another place, the prices of each site is largely unaffected.21 Location
value has duration, and the value of this flow of rights for exclusive use
of a site requires a flow price rather than a stock price. This flow is really
what classical economists refer to as ground rent or economic rent.22 Also
known as “land rent,” it is defined as “a payment to a
factor beyond what is needed to put that factor into use; [it is a price
for use] beyond what is needed to maintain a market for land.”23 Land
has a selling price because we have come to regard land sites as objects,
as commodities to be traded,24 and they are understood to have a static price,
as a stock rather than as a flow. That stock price really needs to be understood
instead as the “present value” of the flow of ground rent minus
taxes. “Present value” is an economic term that refers to “the
worth of a future stream of returns or costs in terms of their value now.”25
Consideration in this way brings to the fore other concerns and factors.
... read the whole commentary