Wealth and Want
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Capital and Labor

When land rent goes into private pockets, neither labor nor capital get their fair returns (wages and interest).  The true entrepreneur (as opposed to the one whose business is mostly collecting land rent) makes out just as badly as the individual who supplies his labor to that entrepreneur.   Meanwhile, the land speculator, the private rent collector hides behind the widow's skirts.  Business plans are never executed, or businesses fail, and a new category of people comes to prominence: the working poor.  Where land is available, there is little poverty.  Where land's price is high, many more people lack sufficient income to provide for their own and their families' needs.  Consider this fact as you think of both American poverty and global poverty.

When people must "invest" large amounts in money in land (whether to rent it from a landlord or to buy it from a seller), they have little left for machinery or equipment (capital) or employees (wages) — or, as homeowners, to build a house and furnish it. Buying land doesn't create jobs for anyone except perhaps real estate brokers and mortgage lenders. Buying machinery and household goods creates jobs. Building homes creates jobs.

H.G Brown: Significant Paragraphs from Henry George's Progress & Poverty, Chapter 8: Why a Land-Value Tax is Better than an Equal Tax on All Property (in the unabridged P&P: Book VIII: Application of the Remedy — Chapter 3: The proposition tried by the canons of taxation)

The ground upon which the equal taxation of all species of property is commonly insisted upon is that it is equally protected by the state. The basis of this idea is evidently that the enjoyment of property is made possible by the state — that there is a value created and maintained by the community, which is justly called upon to meet community expenses. Now, of what values is this true? Only of the value of land. This is a value that does not arise until a community is formed, and that, unlike other values, grows with the growth of the community. It exists only as the community exists. Scatter again the largest community, and land, now so valuable, would have no value at all. With every increase of population the value of land rises; with every decrease it falls. This is true of nothing else save of things which, like the ownership of land, are in their nature monopolies.

The tax upon land values is, therefore, the most just and equal of all taxes.

  • It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive.
  • It is the taking by the community, for the use of the community, of that value which is the creation of the community.
  • It is the application of the common property to common uses.

When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return. ... read the whole chapter

The Most Rev. Dr Thomas Nulty, Roman Catholic Bishop of Meath (Ireland): Back to the Land (1881) 

Both capitalists and operatives, therefore, are intensely disappointed and supremely dissatisfied with these disheartening results, and mutually reproach each other with fraud and foul dealing in the division of their common earnings. Their mutual misunderstandings and rival claims to a larger share than they actually receive have given rise to "lockouts" on the one side and "strikes" on the other; to combinations of capitalists among the employers and "Trade Unions" among the labourers. Thus their mutual relations, which ought to be of the friendliest character, have at last settled down into the permanent form of an insane internecine war, which inflicts irreparable injury on the common interests of both.

It never occurs to either side that a third party could possibly be liable to blame. I think I have shown that neither party has received, or at all events can retain for his own use and enjoyment, its fair share of their common earnings. The existing system of Land Tenure, like a great national thief, robs both parties of an enormous amount of their earnings for the benefit of a class who do not labour at all.

As the operatives complain the louder, so the case they make against the capitalists seem really the weaker and the worse founded of the two. Mr. Cairnes, with many others, proved to evidence that unless in rare and exceptional cases it is perfectly impossible for the capitalist to withhold from the operatives their fair share in their common earnings.  Read the whole letter

Henry George: The Great Debate: Single Tax vs Social Democracy  (1889)
There is in capital no power to oppress labour; capital is not the employer of labour; labour is the employer of capital. (Applause.) That is the natural order; labour came before capital could be; it is labour produces capital; there is no particle of capital that can properly be styled capital that labour has not been exerted to produce. (Hear, hear.) Give labour land; let it get it on equal terms; secure to the labourer the reward of his exertions, and the distinction between the labourer and the capitalist will pass away. With the increase in the wages of labour if there be great organizations of capital they must necessarily be co-operative organizations in which labour shall have its full share and its full right. (Applause.) ...  Read the entire article

"A. J. O."  (probably Mark Twain)  Slavery
... I am capital and I employ people!
But I gain in other ways besides pecuniary benefit. I have lost the stigma of being a slave driver, and have, acquired instead the character of a man of energy and enterprise, of justice and benevolence. I am a "large employer of labour," to whom the whole country, and the labourer especially, is greatly indebted, and people say, "See the power of capital! These poor labourers, having no capital, could not use the land if they had it, so this great and far-seeing man wisely refuses to let them have it, and keeps it all for himself, but by providing them with employment his capital saves them from pauperism, and enables him to build up the wealth of the country, and his own fortune together."

Whereas it is not my capital that does any of these things. It is not my capital but the labourer’s toil that builds up my fortune and the wealth of the country. It is not my employment that keeps him from pauperism, but my monopoly of the land forcing him into my employment that keeps him on the brink of it. It is not want of capital that keeps the labourer from using the land, but my refusing him the use of the land that prevents him from acquiring capital. All the capital he wants to begin with is an axe and a spade, which a week’s earnings would buy him, and for his maintenance during the first year, and at any subsequent time, he could work for me or for others, turnabout, with his work on his own land. Henceforth with every year his capital would grow of itself, and his independence with it, and that this is no fancy sketch, anyone can see for himself by taking a trip into the country, where he will find well-to-do farmers who began with nothing but a spade and an axe (so to speak) and worked their way up in the manner described.  ...  Read the whole piece

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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper