Wealth and Want
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By compensation, in this particular context, I don't mean wages.

Rather, I'm referring to the question that commonly comes up about whether those whose net worth might be negatively impacted by shifting taxes from work and sales and capital and onto land — most particularly, the owners of the very best urban land — should be compensated for their loss, and if so, by whom, and how?

It is not a new question. When the United States finally began to move toward ending chattel slavery, there were serious suggestions that someone should compensate the slaveholders for their loss! Who, though? Those who hadn't enslaved anyone? The slaves themselves? In proportion to what? From what source? At what cost to the economy?

What happens when a society realizes that one of its standard practices is unjust? Should those who have been benefiting from the injustice be compensated by those who weren't benefiting? Should the difficulty in answering this question mean that the injustice should be allowed to continue longer, or should we simply end the injustice?

Interesting question. The good news is that the reform this website advocates can reasonably be expected to produce tremendous economic growth and widely shared prosperity, which, for most people, particular those in the bottom 95% of the income distribution, should be a major net benefit. The bad news, of course, is that special interests are quite powerful, and have lots of money to spend on slowing reform — and that studies suggest that 19% of us think we're in the top 1%.

Consider what rent is. It does not arise spontaneously from land; it is due to nothing that the land owners have done. It represents a value created by the whole community.

Let the land holders have, if you please, all that the possession of the land would give them in the absence of the rest of the community. But rent, the creation of the whole community, necessarily belongs to the whole community.*

* To the view of the extreme conservative that due consideration for the claims of rent receivers negatives the adoption of such a policy, it may be replied that society as such is under no obligation to maintain an unchanged policy through out all future time. Public policies are constantly changing in such ways as to disappoint the expectations of persons who have invested on the supposition that policies would not change and to affect the value of their property. Tarriffs are raised, and lowered. The brewing of spirituous liquors is at one time permitted and at another time outlawed. Prices of monopolized services are first left to be fixed by the monopolist and are then regulated. Taxes are increased on some goods and decreased on others. In some communities taxes have already been made higher on land values than on improvements. Purchasers of land have no right to insist that society may not, even by gradual steps, discriminate in taxation against land rent, which is an income socially produced. (Henry George himself elsewhere said -- Century Magazine, July, 1890 -- that "we cannot get to the Single Tax at one leap, but only by gradual steps.") We must presume that land owners, like other persons, buy their property with no guarantee that public policy will never change. The conservative insistence that society, which makes frequent changes of policy in other matters, is under a binding implied pledge and obligation never to move, even by successive steps, towards the eventual taking of the economic rent of land by taxation, seems preposterous. H. G. B. ... read the whole chapter

Henry George:  The Land Question (1881)

Either the land of Ireland rightfully belongs to the Irish landlords, or it rightfully belongs to the Irish people; there can be no middle ground. If it rightfully belongs to the landlords, then is the whole agitation wrong, and every scheme for interfering in any way with the landlords is condemned. If the land rightfully belongs to the landlords, then it is nobody else's business what they do with it, or what rent they charge for it, or where or how they spend the money they draw from it, and whoever does not want to live upon it on the landlords' terms is at perfect liberty to starve or emigrate. But if, on the contrary, the land of Ireland rightfully belongs to the Irish people, then the only logical demand is, not that the tenants shall be made joint owners with the landlords, not that it be bought from a smaller class and sold to a larger class, but that it be resumed by the whole people. To propose to pay the landlords for it is to deny the right of the people to it. The real fight for Irish rights must he made outside of Ireland; and, above all things, the Irish agitators ought to take a logical position, based upon a broad, clear principle which can be everywhere understood and appreciated. To ask for tenant-right or peasant proprietorship is not to take such a position; to concede that the landlords ought to be paid is utterly to abandon the principle that the land belongs rightfully to the people.

To admit, as even the most radical of the Irish agitators seem to admit, that the landlords should be paid the value of their lands, is to deny the rights of the people. It is an admission that the agitation is an interference with the just rights of property. It is to ignore the only principle on which the agitation can be justified, and on which it can gather strength for the accomplishment of anything real and permanent. To admit this is to admit that the Irish people have no more right to the soil of Ireland than any outsider. For, any outsider can go to Ireland and buy land, if he will give its market value. To propose to buy out the landlords is to propose to continue the present injustice in another form. They would get in interest on the debt created what they now get in rent. They would still have a lien upon Irish labor.

And why should the landlords be paid? If the land of Ireland belongs of natural right to the Irish people, what valid claim for payment can be set up by the landlords? No one will contend that the land is theirs of natural right, for the day has gone by when men could be told that the Creator of the universe intended his bounty for the exclusive use and benefit of a privileged class of his creatures – that he intended a few to roll in luxury while their fellows toiled and starved for them. The claim of the landlords to the land rests not on natural right, but merely on municipal law – on municipal law which contravenes natural right. And, whenever the sovereign power changes municipal law so as to conform to natural right, what claim can they assert to compensation? Some of them bought their lands, it is true; but they got no better title than the seller had to give. And what are these titles? Titles based on murder and robbery, on blood and rapine–titles which rest on the most atrocious and wholesale crimes. Created by force and maintained by force, they have not behind them the first shadow of right. That Henry II and James I and Cromwell and the Long Parliament had the power to give and grant Irish lands is true; but will any one contend they had the right? Will any one contend that in all the past generations there has existed on the British Isles or anywhere else any human being, or any number of human beings, who had the right to say that in the year 1881 the great mass of Irishmen should be compelled to pay – in many cases to residents of England, France, or the United States – for the privilege of living in their native country and making a living from their native soil? Even if it be said that might makes right; even if it be contended that in the twelfth, or seventeenth, or eighteenth century lived men who, having the power, had therefore the right, to give away the soil of Ireland, it cannot be contended that their right went further than their power, or that their gifts and grants are binding on the men of the present generation. No one can urge such a preposterous doctrine. And, if might makes right, then the moment the people get power to take the land the rights of the present landholders utterly cease, and any proposal to compensate them is a proposal to do a fresh wrong. ....

Consider: is not the parallel I have drawn a true one? Is it not just as much a perversion of ideas to apply the doctrine of vested rights to property in land, when these are its admitted fruits, as it was to apply it to property in human flesh and blood; as it would be to apply it to the business of piracy? In what does the claim of the Irish landholders differ from that of the hereditary pirate or the man who has bought out a piratical business? "Because I have inherited or purchased the business of robbing merchantmen," says the pirate, "therefore respect for the rights of property must compel you to let me go on robbing ships and making sailors walk the plank until you buy me out." "Because we have inherited or purchased the privilege of appropriating to ourselves the lion's share of the produce of labor," says the landlord, "therefore you must continue to let us do it, even though poor wretches shiver with cold and faint with hunger, even though, in their poverty and misery, they are reduced to wallow with the pigs." What is the difference?

This is the point I want to make clearly and distinctly, for it shows a distinction that in current thought is overlooked. Property in land, like property in slaves, is essentially different from property in things that are the result of labor. Rob a man or a people of money, or goods, or cattle, and the robbery is finished there and then. The lapse of time does not, indeed, change wrong into right, but it obliterates the effects of the deed. That is done; it is over; and, unless it be very soon righted, it glides away into the past, with the men who were parties to it, so swiftly that nothing save omniscience can trace its effects; and in attempting to right it we would be in danger of doing fresh wrong. The past is forever beyond us. We can neither punish nor recompense the dead. But rob a people of the land on which they must live, and the robbery is continuous. It is a fresh robbery of every succeeding generation–a new robbery every year and every day; it is like the robbery which condemns to slavery the children of the slave. To apply to it the statute of limitations, to acknowledge for it the title of prescription, is not to condone the past; it is to legalize robbery in the present, to justify it in the future. The indictment which really lies against the Irish landlords is not that their ancestors, or the ancestors of their grantors, robbed the ancestors of the Irish people. That makes no difference. "Let the dead bury their dead." The indictment that truly lies is that here, now, in the year 1881, they rob the Irish people. And shall we be told that there can be a vested right to continue such robbery?... read the whole article

Henry George: In Liverpool: The Financial Reform Meeting at the Liverpool Rotunda (1889)

The People who say that such terrible things would follow the institution of the single tax are simply like the people who had predicted terrible things to follow the building of railroads and the abolition of chattel slavery. Why I remember, and Mr. Garrison well remembers, the day when in the United States all the arguments that are used in this country against the single tax were used against the abolition of chattel slavery, even down to the "poor widow argument."

We used to be told — I was only a boy then — we used to be told, when William Lloyd Garrison, father of this man, was the best denounced man on two continents, that it might be well if we could find the people who originally brought these slaves from Africa, to make them give them up. "But," it was urged, "these negroes are owned by people who paid their money for them. (Laughter) Would you take away from a man without any compensation the property that he bought?" (Laughter) Then we used to be told, as you are told now, about that hard working mechanic. "Here is a hard working laboring man. He has toiled early and late, and he has bought a slave to help him. Are you going to take a man's slave without compensation and rob him of the products of his labor?" (Laughter) So they say today of the English mechanic, or English laborer, who has bought himself a little bit of land. And then we used to be told: "Here is a man who worked hard and saved his money, and he invested in half-a-dozen slaves. He died, and those slaves are the only means of subsistence the widow has to support his orphan children. Would you emancipate those slaves, and let that poor widow and those little orphans starve to death?" (Laughter)

Slavery and Slavery

It is the old, old story! And no wonder, for property in land is just as absurd! just as monstrous as property in human beings. (Hear, hear, and cheers) What difference does it make whether you enslave a man by making his flesh and blood the property of another, or whether you enslave him by making the property of another that element on which and from which he must live if he is to live at all? (A voice: "None whatever!" and cheers)

Why, in those old days slave ships used to set out from this town of Liverpool for the coast of Africa to buy slaves. They did not bring them to Liverpool; they took them over to America. Why? Because you people were so good, and the Englishmen who had got to the other side of the Atlantic, and had settled there, were so bad? Not at all. I will tell you why the Liverpool ships carried slaves to America and did not bring them back to England. Because in America population was sparse and land was plentiful. Therefore to rob a man of his labor — and that is what the slaveowner wanted the slave for — you had got to catch and hold the man. That is the reason the slaves went to America. The reason they did not come here, the reason they were not carried over to Ireland was that here population was relatively dense, land was relatively scarce and could easily be monopolized, and to get out of the laborer all that his labor could furnish, save only wages enough to keep him alive even the slaveowner had to give this — it was only necessary to own land. ... read the whole speech

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. ... read the whole letter

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

THE common law we are told is the perfection of reason, and certainly the landowners cannot complain of its decision, for it has been built up by and for landowners. Now what does the law allow to the innocent possessor when the land for which he paid his money is adjudged to rightfully belong to another? Nothing at all. That he purchased in good faith gives him no right or claim whatever. The law does not concern itself with the "intricate question of compensation" to the innocent purchaser. The law does not say, as John Stuart Mill says: "The land belongs to A, therefore B who has thought himself the owner has no right to anything but the rent, or compensation for its salable value." For that would be indeed like a famous fugitive slave case decision in which the Court was said to have given the law to the North and the nigger to the South. The law simply says: "The land belongs to A, let the Sheriff put him in possession! " — Progress & Poverty — Book VII, Chapter 3, Justice of the Remedy: Claim of Landowners to Compensation

COMPENSATED for what? For giving up what has been unjustly taken? The demand of land-owners 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-value, have taken the fruits of labor, retain what they have thus got. We merely propose that for the future such robbery of labor shall cease. — NOW, is the State called on to compensate men for the failure of their expectations as to its action, even where no moral element is involved? If it make peace, must it compensate those who have invested on the expectation of war. If it open a shorter highway, is it morally bound to compensate those who may lose by the diversion of travel from the old one? If it promote the discovery of a cheap means of producing electricity directly from heat, is it morally bound to compensate the owners of all the steam engines thereby thrown out of use and all who are engaged in making them? If it develop the air-ship, must it compensate those whose business would be injured? Such a contention would be absurd. — The Condition of Labor

Yet the contention we are considering is worse. It is that the State must compensate for disappointing the expectations of those who have counted on its continuing to do wrong. — A Perplexed Philosopher (Compensation)

COMPENSATION implies equivalence. To compensate for the discontinuance of a wrong is to give those who profit by the wrong the pecuniary equivalent of its continuance. Now the State has nothing that does not belong to the individuals who compose it. What it gives to some it must take from others. Abolition with compensation is therefore not really abolition, but continuance under a different form — on one side of unjust deprivation, and on the other side of unjust appropriation. — A Perplexed Philosopher (Compensation)

"CAVEAT emptor" is the maxim of the law — "Let the buyer beware!" If a man buys a structure in which the law of gravity is disregarded or mechanical laws ignored, he takes the risk of those laws asserting their sway. And so he takes the risk in buying property which contravenes the moral law. When he ignores the moral sense, when he gambles on the continuance of a wrong, and when at last the general conscience rises to the point of refusing to continue that wrong, can he then claim that those who have refrained from taking part in it, those who have suffered from it, those who have borne the burden and heat and contumely of first moving against it, shall share in his losses on the ground that as members of the same state they are equally responsible for it? And must not the acceptance of this impudent plea tend to prevent that gradual weakening and dying out of the wrong, which would otherwise occur as the rise of the moral sense against it lessened the prospect of its continuance; and by promise of insurance to investors tend to maintain it in strength and energy till the last minute? — A Perplexed Philosopher (Compensation)

ALL pleas for compensation on the abolition of unequal rights to land are excuses for avoiding right and continuing wrong; they all, as fully as the original wrong, deny that equalness which is the essential of justice. Where they have seemed plausible to any honestly-minded man, he will, if he really examines his thought, see that this has been so because he has, though perhaps unconsciously, entertained a sympathy for those who seem to profit by injustice which he has refused to those who have been injured by it. He has been thinking of the few whose incomes would be cut off by the restoration of equal right. He has forgotten the many, who are being impoverished, degraded, and driven out of life by its denial. If he once breaks through the tyranny of accustomed ideas and truly realizes that all men are equally entitled to the use of the natural opportunities for the living of their lives and the development of their powers, he will see the injustice, the wickedness, of demanding compensation for the abolition of the monopoly of land. He will see that if anyone is to be compensated on the abolition of a wrong, it is those who have suffered by the wrong, not those who have profited by it. — A Perplexed Philosopher (Compensation)

JUSTICE in men's mouths is cringingly humble when she first begins a protest against a time-honored wrong, and we of the English-speaking nations still wear the collar of the Saxon thrall, and have been educated to look upon the "vested rights" of landowners with all the superstitious reverence that ancient Egyptians looked upon the crocodile. But when the times are ripe for them, ideas grow, even though insignificant in their first appearance. One day, the Third Estate covered their heads when the king put on his hat. A little while thereafter, and the head of a son of St. Louis rolled from the scaffold. The anti-slavery movement in the United States commenced with talk of compensating owners, but when four millions of slaves were emancipated, the owners got no compensation, nor did they clamor for any. And by the time the people of any such country as England or the United States are sufficiently aroused to the injustice and disadvantages of individual ownership of land to induce them to attempt its nationalization, they will be sufficiently aroused to nationalize it in a much more direct and easy way than by purchase. They will not trouble themselves about compensating the proprietors of land. — Progress & Poverty — Book VII, Chapter 3, Justice of the Remedy: Claim of Landowners to Compensation

IT requires reflection to see that manifold effects result from a single cause, and that the remedy for a multitude of evils may lie in one simple reform. As in the infancy of medicine, men were disposed to think each distinct symptom called for a distinct remedy, so when thought begins to turn to social subjects there is a disposition to seek a special cure for every ill, or else (another form of the same short-sightedness) to imagine the only adequate remedy to be something which presupposes the absence of those ills; as, for instance, that all men should be good, as the cure for vice and crime; or that all men should be provided for by the State, as the cure for poverty. — Protection or Free Trade — Chapter 28: Free Trade and Socialism - econlib

JUSTICE in men's mouths is cringingly humble when she first begins a protest against a time-honored wrong, and we of the English-speaking nations still wear the collar of the Saxon thrall, and have been educated to look upon the "vested rights" of landowners with all the superstitious reverence that ancient Egyptians looked upon the crocodile. But when the times are ripe for them, ideas grow, even though insignificant in their first appearance. One day, the Third Estate covered their heads when the king put on his hat. A little while thereafter, and the head of a son of St. Louis rolled from the scaffold. The anti-slavery movement in the United States commenced with talk of compensating owners, but when four millions of slaves were emancipated, the owners got no compensation, nor did they clamor for any. And by the time the people of any such country as England or the United States are sufficiently aroused to the injustice and disadvantages of individual ownership of land to induce them to attempt its nationalization, they will be sufficiently aroused to nationalize it in a much more direct and easy way than by purchase. They will not trouble themselves about compensating the proprietors of land. — Progress & Poverty — Book VII, Chapter 3, Justice of the Remedy: Claim of Landowners to Compensation

IT requires reflection to see that manifold effects result from a single cause, and that the remedy for a multitude of evils may lie in one simple reform. As in the infancy of medicine, men were disposed to think each distinct symptom called for a distinct remedy, so when thought begins to turn to social subjects there is a disposition to seek a special cure for every ill, or else (another form of the same short-sightedness) to imagine the only adequate remedy to be something which presupposes the absence of those ills; as, for instance, that all men should be good, as the cure for vice and crime; or that all men should be provided for by the State, as the cure for poverty. — Protection or Free Trade — Chapter 28: Free Trade and Socialism - econlib ... go to "Gems from George"

Louis Post: Outlines of Louis F. Post's Lectures, with Illustrative Notes and Charts (1894) — Appendix: FAQ

Q60. If the value of land be destroyed by the single tax, would not justice require that land-owners be compensated?
A. No. Land is given for the use of all, and rent is produced by the community as a whole. To legally vest land-ownership in less than the whole, excluding those to come as well as those that are here, is a moral crime against all who are excluded. Therefore no government can make a perpetual title to land which is or can become morally binding. Neither can one generation vest the communal earnings of future generations in particular persons by any morally valid title, as they certainly attempt to do when they make grants of land. There is both divine justice and economic wisdom in the command that "the land shall not be sold in perpetuity." In the forum of morals all titles to land are subject to absolute divestment as soon as the people decide upon the change.

Q61. If a man buys land in good faith, under the laws under which we live, is he not entitled to compensation for his individual loss when titles are abolished?
A. There is no sounder principle of law than that which, distinguishing the contractual from the legislative powers of government, prescribes that government cannot tie up its legislative powers. Now, land tenures and taxation are so clearly matters of general public policy that no one would deny that they are legislative and not contractual in character. It follows that titles to land, and privileges of more or less exemption from taxation, are voidable at the pleasure of the people. And the possibility of such action on the part of the people is as truly a part of every grant of land as if it were written expressly in the body of the instrument. Moreover, notice was given when Henry George published "Progress and Poverty," and has been reiterated often since in louder and louder tones until the whole civilized world has become cognizant of it, that an effort is in progress to do what is in effect this very thing. That notice is a moral cloud upon every title, and he who buys now buys with notice. It will not do for him when the time comes, to say: "I relied upon the good faith of the government whose laws told me I might buy." He has notice, and if he buys he buys at his peril. Men cannot be allowed to make bets that the effort to retain land values for common use will fail, and then when they lose their bets call upon the people to compensate them for the loss. Read the chapter on "Compensation" in Henry George's "Perplexed Philosopher." ... read the book

Charles B. Fillebrown: A Catechism of Natural Taxation, from Principles of Natural Taxation (1917)

Q48. But would it not be an injustice to the landowner?
A. If it be an injustice to tax hard-earned incomes (wages) to maintain an unearned income (net economic rent) that bears no tax burden, how can it be an injustice to stop doing so? There can be no injustice in taking for the benefit of the community the value that is created by the community.

... read the whole article

Nic Tideman: Being Just While Conceptions of Justice are Changing

The paper argues that there are a variety of factors that attenuate claims for compensation and make a justifiable system of compensation so complex that it may be unworkable. But if there is to be a system of compensation, the one justifiable source of funds to finance it is assets that have been acquired by appropriating or buying land and then selling it. ...  Read the whole article

Nic Tideman: The Structure of an Inquiry into the Attractiveness of A Social Order Inspired by the Ideas of Henry George
 I. Ethical Principles

A. People own themselves and therefore own what they produce.
B. People have obligations to share equally the opportunities that are provided by nature.
C. People are free to interact with other competent adults on whatever terms are mutually agreed.
D. People have obligations to pay the costs that their intrusive behaviors impose on others.
II. Ethical Questions
A. What is the relationship between justice (as embodied in the ethical principles) and community (or peace or harmony)?
B. How are the weak to be provided for?
C. How should natural opportunities be shared?
D. Who should be included in the group among whom rent should be shared equally?
E. Is there an obligation to compensate those whose presently recognized titles to land and other exclusive natural opportunities will lose value when rent is shared equally?
F. Can a person who is occupying a per capita share of land reasonably ask to be left undisturbed indefinitely on that land?
G. What is the moral status of "intellectual property?"
H. What standards of environmental respect can people reasonably require of others?
I. What forms of land use control are consistent with the philosophy of Henry George?
III. Efficiency Questions
A. Would public collection of the rent of land provide enough revenue for an appropriate public sector?
B. How much revenue could public collection of rent raise?
C. Is it possible to assess land with sufficient accuracy?
D. How much growth can a community expect if it shifts taxes from improvements to land?
E. To what extent does the benefit that one community receives from shifting taxes from buildings to land come at the expense of other communities?
F. What is the impact of land taxes on land speculation?
G. How, if at all, does the impact of shifting the source of public revenue to land change if it is a whole nation rather than just a community that makes the shift?
H. Is there a danger that the application of Henry George's ideas would lead to a world of over-development?
I. How would natural resources be managed appropriately if they were regarded as the common heritage of humanity?   Read the whole article

Henry George:  The Land Question (1881)

The galleys that carried Caesar to Britain, the accoutrements of his legionaries, the baggage that they carried, the arms that they bore, the buildings that they erected; the scythed chariots of the ancient Britons, the horses that drew them, their wicker boats and wattled houses–where are they now? But the land for which Roman and Briton fought, there it is still. That British soil is yet as fresh and as new as it was in the days of the Romans. Generation after generation has lived on it since, and generation after generation will live on it yet. Now, here is a very great difference. The right to possess and to pass on the ownership of things that in their nature decay and soon cease to be is a very different thing from the right to possess and to pass on the ownership of that which does not decay, but from which each successive generation must live.

To show how this difference between land and such other species of property as are properly styled wealth bears upon the argument for the vested rights of landholders, let me illustrate again.

Captain Kidd was a pirate. He made a business of sailing the seas, capturing merchantmen, making their crews walk the plank, and appropriating their cargoes. In this way he accumulated much wealth, which he is thought to have buried. But let us suppose, for the sake of the illustration, that he did not bury his wealth, but left it to his legal heirs, and they to their heirs and so on, until at the present day this wealth or a part of it has come to a great-great-grandson of Captain Kidd. Now, let us suppose that some one – say a great-great-grandson of one of the shipmasters whom Captain Kidd plundered, makes complaint, and says: "This man's great-great-grandfather plundered my great-great-grandfather of certain things or certain sums, which have been transmitted to him, whereas but for this wrongful act they would have been transmitted to me; therefore, I demand that he be made to restore them." What would society answer?

Society, speaking by its proper tribunals, and in accordance with principles recognized among all civilized nations, would say: "We cannot entertain such a demand. It may be true that Mr. Kidd's great-great-grandfather robbed your great-great-grandfather, and that as the result of this wrong he has got things that otherwise might have come to you. But we cannot inquire into occurrences that happened so long ago. Each generation has enough to do to attend to its own affairs. If we go to righting the wrongs and reopening the controversies of our great-great-grandfathers, there will be endless disputes and pretexts for dispute. What you say may be true, but somewhere we must draw the line, and have an end to strife. Though this man's great-great-grandfather may have robbed your great-great-grandfather, he has not robbed you. He came into possession of these things peacefully, and has held them peacefully, and we must take this peaceful possession, when it has been continued for a certain time, as absolute evidence of just title; for, were we not to do that, there would be no end to dispute and no secure possession of anything."

Now, it is this common-sense principle that is expressed in the statute of limitations – in the doctrine of vested rights. This is the reason why it is held – and as to most things held justly   – that peaceable possession for a certain time cures all defects of title.

But let us pursue the illustration a little further:

Let us suppose that Captain Kidd, having established a large and profitable piratical business, left it to his son, and he to his son, and so on, until the great-great-grandson, who now pursues it, has come to consider it the most natural thing in the world that his ships should roam the sea, capturing peaceful merchantmen, making their crews walk the plank, and bringing home to him much plunder, whereby he is enabled, though he does no work at all, to live in very great luxury, and look down with contempt upon people who have to work. But at last, let us suppose, the merchants get tired of having their ships sunk and their goods taken, and sailors get tired of trembling for their lives every time a sail lifts above the horizon, and they demand of society that piracy be stopped.

Now, what should society say if Mr. Kidd got indignant, appealed to the doctrine of vested rights, and asserted that society was bound to prevent any interference with the business that he had inherited, and that, if it wanted him to stop, it must buy him out, paying him all that his business was worth–that is to say, at least as much as he could make in twenty years' successful pirating, so that if he stopped pirating he could still continue to live in luxury off of the profits of the merchants and the earnings of the sailors?

What ought society to say to such a claim as this? There will be but one answer. We will all say that society should tell Mr. Kidd that his was a business to which the statute of limitations and the doctrine of vested rights did not apply; that because his father, and his grandfather, and his great- and great-great-grandfather pursued the business of capturing ships and making their crews walk the plank, was no reason why lie should be permitted to pursue it. Society, we will all agree, ought to say he would have to stop piracy and stop it at once, and that without getting a cent for stopping.

Or supposing it had happened that Mr. Kidd had sold out his piratical business to Smith, Jones, or Robinson, we will all agree that society ought to say that their purchase of the business gave them no greater right than Mr. Kidd had.

We will all agree that that is what society ought to say. Observe, I do not ask what society would say.

For, ridiculous and preposterous as it may appear, I am satisfied that, under the circumstances I have supposed, society would not for a long time say what we have agreed it ought to say. Not only would all the Kidds loudly claim that to make them give up their business without full recompense would be a wicked interference with vested rights, but the justice of this claim would at first be assumed as a matter of course by all or nearly all the influential classes–the great lawyers, the able journalists, the writers for the magazines, the eloquent clergymen, and the principal professors in the principal universities. Nay, even the merchants and sailors, when they first began to complain, would be so tyrannized and browbeaten by this public opinion that they would hardly think of more than of buying out the Kidds, and, wherever here and there any one dared to raise his voice in favor of stopping piracy at once and without compensation, he would only do so under penalty of being stigmatized as a reckless disturber and wicked foe of social order.

If any one denies this, if any one says mankind are not such fools, then I appeal to universal history to bear me witness. I appeal to the facts of to-day.

Show me a wrong, no matter how monstrous, that ever yet, among any people, became ingrafted in the social system, and I will prove to you the truth of what I say. ...

What is the slave-trade but piracy of the worst kind? Yet it is not long since the slave-trade was looked upon as a perfectly respectable business, affording as legitimate an opening for the investment of capital and the display of enterprise as any other. The proposition to prohibit it was first looked upon as ridiculous, then as fanatical, then as wicked. It was only slowly and by hard fighting that the truth in regard to it gained ground. Does not our very Constitution bear witness to what I say? Does not the fundamental law of the nation, adopted twelve years after the enunciation of the Declaration of Independence, declare that for twenty years the slave-trade shall not be prohibited nor restricted? Such dominion had the idea of vested interests over the minds of those who had already proclaimed the inalienable right of man to life, liberty, and the pursuit of happiness! ... read the whole article

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

... Furthermore, he has built on these parcels a barn and two storehouses.

The method of computing the proper selling price under such circumstances would have to be the result of experience, but that price would certainly include the present value of the improvements and probably some lump sum besides, as compensation for loss of farming opportunity. But just as certainly it would not include, (as it would do under our present conditions), the increased location value which the town itself has created by its own growth and public works, and which in all justice belongs to the town or community and not to the individual. ...

But again the voice of the objector is heard, possibly to this effect: "This plan may be all right for the community, but how about poor Mr. Rhinelastor?"

In reality the landowner would not suffer so much from the restoration of the public revenue as might at first appear. For one thing, whereas he is now taxed, at least in theory, not only on land, but on buildings, cash, bonds, and all other personal property, and perhaps on his income as well, he would then have no taxes at all to pay. Furthermore the economic rent is not the full measure of the possible earning capacity of the land, but will always be less than the offerer expects to make out of its use.

Again, while it must be firmly insisted that the economic rent is the rightful property of the community and not of the landowner, the community would probably never take it all. Communal ownership of land is not desirable, even if it were practicable. Individual ownership and management are best, and it is not at all improper for the community to allow the owner something for caring for the land to which he holds title, and for collecting and transmitting to the treasury the economic rent.

But — and right here is one of the prime advantages of the abolition of taxation — Mr. Rhinelastor, in order to get satisfactory return from his land, must improve it. Unless he is satisfied with a small income from it, to wit, the proportion of the economic rent which the community chooses to leave in his hands, he must put upon his land the best building the location will warrant. The rents of this building will be his in their entirety, not one dollar of them being taken from him by taxation. If he is not prepared or not willing to do this he would probably find it more profitable, before he leaves the country, to sell the land to some one of the many persons who are eager to build upon it. It will always be salable, although not by any means at present figures.

Now imagine for a moment the effect upon the appearance of a city and upon the comfort of its population which would result from the change of fiscal policy which this article proposes. At present, a tempting premium is placed upon keeping land unimproved or inadequately improved, while a heavy penalty is imposed upon improvement. Most land appreciates constantly. All buildings depreciate from the moment of completion. Yet the building is taxed equally with the land.

What incentive does such a system offer the speculative landowner to put up a commodious, well-lighted modern structure in place of the old ruin which now pays him so well? The old one cannot depreciate much more, and while paying a trifling tax because of its physical worthlessness, he is thereby enabled to collect and pocket the economic rent of the ground, which the community is continually rendering more valuable. The new building would absorb a large amount of capital, would begin to run down even before it could be occupied, and would be taxed to the limit. Why then is not the landlord justified in letting well enough alone, enjoying the growing economic rent, and waiting till he can get a fancy price for the right to collect it?

But reverse the conditions. 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 ... read the whole article

Henry George: The Land for the People (1889 speech)

HOW can you remedy it? Only by going to first principles. only by asserting the natural rights of man. You cannot do it by any such scheme as is proposed here of buying out the landlords and selling again to the tenant farmers. What good is that going to do to the laborers? What benefit is it to be to the artisans of the city? And what benefit is it going to be to the farming class in the long run? For just as certain as you do that, just as certain will you see going on here what we have seen going on in the United States, and by the vicissitudes of life, by the changes of fortune, by the differences among men -- some men selling and mortgaging, some men acquiring wealth and others becoming poorer -- in a little while you will have the reestablishment of the old system. But it is not just in any consideration. What better right has an agricultural tenant to receive any special advantage from the community than any other man? If farms are to be bought for the agricultural tenant, why should not boots for the artisans, shops for the clerks, boats for the fishermen -- why should not the Government step in to furnish everyone with capital? And consider this with regard to the buying out of the landlords. Why, in Heaven's name, should they be bought out? Bought out of what? Bought out of the privilege on imposing a tax upon their fellow-citizens? Bought out of the privilege of appropriating what belongs to all? That is not justice. If, when the people regain their rights, compensation is due to anybody it is due to those who have suffered injustice not to those who have caused it and profited by it.  Read the whole speech


Nic Tideman: The Case for Site Value Rating

If site value rating is used only to finance local public services and to reward private activities that raise the rental value of land, the resulting reductions in other taxes on commerce and housing can be expected to raise the rental value of land by enough that land will retain most of its present sale value, and there will be no issue of compensating the existing owners of land. On the other hand, if the full rental value of land is collected through site value rating, then the sale value of unimproved land will fall to approximately zero. The sale value of houses will fall to the value of the houses themselves. Do the owners of land deserve compensation for these reductions in the market value of their wealth?

First, it should be pointed out that the average taxpayer will pay the same tax as before, but in a different form. Site value rating will be substituted for some combination of income taxes, excise taxes, community charges, property value rates, and other taxes. A person should not complain about a change in the form of the taxes he pays if the total is the same. The above argument would be sufficient if every individual paid the same total tax after the change, but of course this will not occur. To some extent, increases in the sale value of capital will offset decreases in the sale value of land. This occurs because, by a removal of taxes from capital, site value rating will greatly increase the private returns to capital. This will generate a massive flow of capital toward any nation or region that reduces its taxes on capital. But such flows cannot occur instantaneously, and before they are completed the reductions in taxes on capital will raise the value of capital. In general, young persons will benefit more than older persons from a move to site value rating, because they tend to own less expensive plots of land if they own land at all, and they have many years ahead of them to benefit from reduction in other taxes. Those who are yet unborn will benefit most of all, because their birthrights to equal shares of the provenance of nature, as well as to the product of their labour, will be recognized. Net financial losses will tend to be greatest for older persons. Their houses will fall in sale value. They will be required to pay annually the rental value of the land on which their houses sit, without as much in reductions of their income taxes, and with fewer years ahead of them to reap tax savings. On the other hand, they will have less concern about providing for their children, because houses will be much easier for their children to acquire. Further offsetting any claim to compensation would be any past unearned profits that potential claimants had made on ownership of land.

In some circumstances, a claim for compensation would have merit. If a person had purchased a title to land from the government just before the introduction of site value rating, that person could reasonably claim compensation from government action that eliminated the value of his purchase. Even if a substantial amount of time has passed, it can be argued that a government should not be permitted to eliminate by legislation the value of an asset that it has sold. On this basis, anyone who owned land that was at one time purchased from the government would have a reasonable claim on a return of the (inflation adjusted) price for which the land was purchased from the government. A claim for interest on the purchase price could not be sustained, however. The use of the land since the time of purchase offsets the interest that could otherwise be claimed. ... read the whole article

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

As shown by the equations earlier in this report, the land value tax is not even any burden on future owners of the land, since the tax on the land reduces its purchase price. What the owner pays in a tax on his geo-rent, he saves in not having to pay that amount as mortgage interest. There are two ways of addressing any net burden that might fall on current landowners during a shift to land value taxes.
  • First, landowners could be compensated.
  • Second, the shift could be implemented gradually, allowing land values to fall to accommodate the expected and gradually implemented tax shift.

As a concrete example, the transition to land value taxation can be accomplished in these steps: ... read the whole document


Joseph Stiglitz: October, 2002, interview

Q: However, when you speak of land reform, do you have concerns about compensation as an issue in its implementation?

JES: That is one of the key issues. And there's a program at the World Bank that's been started in Brazil, which is called "Market-Based Land Reform" where they buy the land and give it or sell it to the workers. They use government power to obtain the right to buy it. ... read the entire interview


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