Three Hats

Each of us may wear more than one hat.

• We have our labor, the ability to work, and therefore may be Labor.
• If we have been able to save some of our earnings, or have inherited someone else's savings, we may have invested them, and therefore be Capital.
• Third, we may also be Landholders. While the landholder hat may at first thought be part of being Capital, it is actually quite different.

More important, our interests as Labor are very different from our interests as Capital and from our interests as Landholders. And we should be conscious of whether we are looking for a return on our labor, or on some sort of privilege.

By lowering the price of land and eliminating other taxes, it is likely that many more of us will be able to save something for future consumption, and for investment into others' productivity (capital, on which the return is interest, to sustain us in retirement). The demand for labor which will result from the more intense use of centrally located land will increase wages in this country and increase labor's ability to seek a better return.

The landholder is inert. He doesn't lift a finger or add anything to production. Why should he be paid for his non-effort? Why should our young people have to pay sellers or landlords a large share of their earnings for access to land the sellers and landlords didn't create? (Buildings, particularly ones that aren't brand new, aren't all that expensive.) Collect those funds to meet our common spending needs, and things will improve for all of us.

Many of us have watched as the lot on which we live has appreciated rapidly, perhaps producing more addition to our net worth than our labor does. We may feel very attached to that appreciation, but we've done nothing to earn it.

Those who have "retired" from work may think that their own interests are no longer the interests of labor, that they are now "land" and "capital" and that therefore it behooves them to support the privileges landholders currently receive. But if they have children, or nieces and nephews, or younger neighbors, or think beyond the end of their noses and fingers, ultimately the interests of their fellow human beings must compel them to seek justice for all, not privilege for some.

Rawls

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

AND while in the nature of things any change from wrong-doing to right-doing must entail loss upon those who profit by the wrong-doing, and this can no more be prevented than can parallel lines be made to meet; yet it must also be remembered that in the nature of things the loss is merely relative, the gain absolute. Whoever will examine the subject will see that in the abandonment of the present unnatural and unjust method of raising public revenues and the adoption of the natural and just method even those who relatively lose will be enormous gainers. — A Perplexed Philosopher (Compensation)

MANY landholders are laborers of one sort or another. And it would be hard to find a landowner not a laborer, who is not also a capitalist — while the general rule is, that the larger the landowner the greater the capitalist. So true is this that in common thought the characters are confounded. Thus, to put all taxes on the value of land, while it would be to largely reduce all great fortunes, would in no case leave the rich man penniless. The Duke of Westminster, who owns a considerable part of the site of London, is probably the richest landowner in the world. To take all his ground rents by taxation would largely reduce his enormous income, but would still leave him his buildings and all the income from them, and doubtless much personal property in various other shapes. He would still have all he could by any possibility enjoy, and a much better state of society in which to enjoy it. — Progress & Poverty — Book IX, Chapter 3, Effects of the Remedy: Of the Effect Upon Individuals and Classes

... go to "Gems from George"

Fred E. Foldvary — The Ultimate Tax Reform: Public Revenue from Land Rent

The obstacles to land value taxation are political. The current system benefits certain vested interests that will resist reform. But since the public at large will benefit from a shift to land value taxation, and since they greatly outnumber those obtaining privileges from the current system, the greater reason why this tax reform has not taken place is that the public has not been informed. Once citizens, taxpayers, consumers, and voters understand the option of obtaining public revenue from land value or rent, then the logic of getting both greater efficiency and greater justice may well prevail. ... read the whole document

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. ...

Q27. Would working people, whose savings are in savings banks or insurance companies which own land or have mortgages upon land, lose by the shrinkage in land values?
A. Not if the companies were managed intelligently. Well managed companies would shift their investments as they observed the persistent decline of land values. They would do it even as soon as conditions appeared which would naturally cause land values to shrink. But working people could well afford to give all their savings for the permanent employment and high wages that the single tax would bring about. It is not working people but idle people who would lose anything by the single tax.

wealthandwant editorial comment: Post may be confusing land prices and land value. Land value will continue to rise; land price will fall, as the land tax is capitalized into the price. ...

Q58. Should not the poor man be compensated for the loss of his land value?
A. No. The reasons are numerous. Among them are the following: The poor man's rights in the community and in common property are neither more nor less than the rich man's. The better conditions for the poor man which the single tax would bring about would more than off-set his loss in land values. The poor man has no land values worth speaking of. ... read the book

Charles T. Root — Not a Single Tax! (1925)

Reclaim for the community its natural income, making it expensive either to keep needed land vacant or to withhold it from the ready and willing to improve it to the full extent of its possibilities.

Does it require severe intellectual effort to foresee the results? Better and better houses, apartments, tenements, offices and stores, more employment for labor in all enterprises now held back by the shadow of the tax-gatherer, an end of all tax-lying, tax-evasion and tax-injustice, and withal, a public revenue adequate to all real public needs.

What a contrast to the existing plan of pouring public money into the laps of individual landowners to their own moral disadvantage and that of their children, as well as the economic disadvantage of their neighbors, while constantly cudgeling the civic brains, straining the public credit, impoverishing widows and orphans, and increasing the exactions from every citizen and corporation that can be caught, in the effort to raise more and more money to bestow upon the same beneficiaries. ... read the whole article

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

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.) ...

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. (51.)

This, like much else that your Holiness says, is masked in the use of the indefinite terms “private property” and “private owner” — a want of precision in the use of words that has doubtless aided in the confusion of your own thought. But the context leaves no doubt that by private property you mean private property in land, and by private owner, the private owner of land.

The contention, thus made, that private property in land is from nature, not from man, has no other basis than the confounding of ownership with possession and the ascription to property in land of what belongs to its contradictory, property in the proceeds of labor. You do not attempt to show for it any other basis, nor has any one else ever attempted to do so. That private property in the products of labor is from nature is clear, for nature gives such things to labor and to labor alone. Of every article of this kind, we know that it came into being as nature’s response to the exertion of an individual man or of individual men — given by nature directly and exclusively to him or to them. Thus there inheres in such things a right of private property, which originates from and goes back to the source of ownership, the maker of the thing. This right is anterior to the state and superior to its enactments, so that, as we hold, it is a violation of natural right and an injustice to the private owner for the state to tax the processes and products of labor. They do not belong to Caesar. They are things that God, of whom nature is but an expression, gives to those who apply for them in the way he has appointed — by labor.

But who will dare trace the individual ownership of land to any grant from the Maker of land? What does nature give to such ownership? how does she in any way recognize it? Will any one show from difference of form or feature, of stature or complexion, from dissection of their bodies or analysis of their powers and needs, that one man was intended by nature to own land and another to live on it as his tenant? That which derives its existence from man and passes away like him, which is indeed but the evanescent expression of his labor, man may hold and transfer as the exclusive property of the individual; but how can such individual ownership attach to land, which existed before man was, and which continues to exist while the generations of men come and go — the unfailing storehouse that the Creator gives to man for “the daily supply of his daily wants”?
Clearly, the private ownership of land is from the state, not from nature. Thus, not merely can no objection be made on the score of morals when it is proposed that the state shall abolish it altogether, but insomuch as it is a violation of natural right, its existence involving a gross injustice on the part of the state, an “impious violation of the benevolent intention of the Creator,” it is a moral duty that the state so abolish it.

So far from there being anything unjust in taking the full value of landownership for the use of the community, the real injustice is in leaving it in private hands — an injustice that amounts to robbery and murder.

And when your Holiness shall see this I have no fear that you will listen for one moment to the impudent plea that before the community can take what God intended it to take — before men who have been disinherited of their natural rights can be restored to them, the present owners of land shall first be compensated.

For not only will you see that the single tax will directly and largely benefit small landowners, whose interests as laborers and capitalists are much greater than their interests as landowners, and that though the great landowners — or rather the propertied class in general among whom the profits of landownership are really divided through mortgages, rent-charges, etc. — would relatively lose, they too would be absolute gainers in the increased prosperity and improved morals; but more quickly, more strongly, more peremptorily than from any calculation of gains or losses would your duty as a man, your faith as a Christian, forbid you to listen for one moment to any such paltering with right and wrong.

Where the state takes some land for public uses it is only just that those whose land is taken should be compensated, otherwise some landowners would be treated more harshly than others. But where, by a measure affecting all alike, rent is appropriated for the benefit of all, there can be no claim to compensation. Compensation in such case would be a continuance of the same in another form — the giving to landowners in the shape of interest of what they before got as rent. Your Holiness knows that justice and injustice are not thus to be juggled with, and when you fully realize that land is really the storehouse that God owes to all his children, you will no more listen to any demand for compensation for restoring it to them than Moses would have listened to a demand that Pharaoh should be compensated before letting the children of Israel go.

Compensated for what? For giving up what has been unjustly taken? The demand of landowners for compensation is not that. We do not seek to spoil the Egyptians. We do not ask that what has been unjustly taken from laborers shall be restored. We are willing that bygones should be bygones and to leave dead wrongs to bury their dead. We propose to let those who by the past appropriation of land values have taken the fruits of labor to retain what they have thus got. We merely propose that for the future such robbery of labor shall cease — that for the future, not for the past, landholders shall pay to the community the rent that to the community is justly due. ...

Men who are sure of getting food when they shall need it eat only what appetite dictates. But with the sparse tribes who exist on the verge of the habitable globe life is either a famine or a feast. Enduring hunger for days, the fear of it prompts them to gorge like anacondas when successful in their quest of game. And so, what gives wealth its curse is what drives men to seek it, what makes it so envied and admired — the fear of want. As the unduly rich are the corollary of the unduly poor, so is the soul-destroying quality of riches but the reflex of the want that embrutes and degrades. The real evil lies in the injustice from which unnatural possession and unnatural deprivation both spring.

But this injustice can hardly be charged on individuals or classes. The existence of private property in land is a great social wrong from which society at large suffers, and of which the very rich and the very poor are alike victims, though at the opposite extremes. Seeing this, it seems to us like a violation of Christian charity to speak of the rich as though they individually were responsible for the sufferings of the poor. Yet, while you do this, you insist that the cause of monstrous wealth and degrading poverty shall not be touched. Here is a man with a disfiguring and dangerous excrescence. One physician would kindly, gently, but firmly remove it. Another insists that it shall not be removed, but at the same time holds up the poor victim to hatred and ridicule. Which is right?

In seeking to restore all men to their equal and natural rights we do not seek the benefit of any class, but of all. For we both know by faith and see by fact that injustice can profit no one and that justice must benefit all. ... read the whole letter