"The socialist mistake [is] looking on capital and labor as the two factors of production and as the two parties to the division of the produce. As a matter of fact there are, in our highly-developed industrial system, three parties of production, and always a fourth and generally a fifth related to distribution. In addition to A the employing capitalist and B the employed laborer, there are C the landowner, D the tax collector and generally E the representative of monopolies other than that of land. What A and B can divide between them is not the product of their joint efforts, but the product which C, D and E leaves to them." - Henry George

Among the first questions people tend to ask when they start to hear about these ideas are whether we are talking about socialism, or even communism.  The short answer is "neither — rather, we want capitalism on a level playing field!" 

This website will lead you to think about what rightly belongs to the individual and what rightly belongs to the community.  It provides a simple way to collect for the community what is rightly common property, and to leave to the individual what he created.  So, yes, we seek to socialize that which the individual or corporation didn't create, couldn't possibly create, can't create more of — and privatize that which he does make: the fruits of his labor and the results of his saving which aren't in the nature of common property.

One of the phrases to describe America's existing economic system is "Land Monopoly Capitalism." [The board game Monopoly was an outgrowth of a turn-of-the-century game called The Landlord's Game, designed to teach these ideas.]  What Georgists are proposing is capitalism on a level playing field — something along the line of "Capitalism is a very fine system, and America really ought to try it some time!" 

Having said all that, it is also fair to say that Progress & Poverty, while explicitly and exuberantly in favor of a purer form of capitalism than is practiced anywhere in the world now, probably played a role in bringing many people in the 19th century, particularly in England, to the socialist movement, including George Bernard Shaw.

This page also contains many of Henry George's comments on socialism, few of which are positive.

See The Science of Political Economy, toward the end — the organization of a great ship.

Henry George debated Social Democrat H. M. Hyndman in London in 1889, and the text of that debate highlights the points of commonality and the very significant differences.  In The Wages of Labor, George is extremely critical of the Socialist "solution," making clear why he thinks it both wrong and ineffective.

Henry George: The Great Debate: Single Tax vs Social Democracy  (1889)

We differ as to the means by which that end is to attained. Mr Hyndman styles himself a Social Democrat: I a Single Tax man. Let me state why we have adopted that name and what we mean by it. Looking over the civilised world today,

• we see that labour nowhere gets its just dues. (Hear, hear.)
• We see there is everywhere a fringe of unemployed labour.
• We see all the phenomena that are called sometimes over-production and industrial depression;
• we reject as superficial the theory that this is caused by there being too many people; that this is caused by there not being enough work; that this is caused by the multiplication of labour-saving machinery.
• We say that until human wants are satisfied there can be no such thing as over-production (applause) that until all have enough there is yet plenty of work. (Hear, hear.)
• We trace the cause of all these phenomena to one great fundamental wrong. We ask what work is, and we see that what we call productive work is alteration in place or in form of the raw material of the universe that we call land. We see that man is a land animal; that his very body comes from the land; that all his productions consist in but the working up of the land; and that land to him is absolutely necessary; and we behold everywhere the phenomena of which I have spoken. We see everywhere that this element, indispensable to all, has been made the property of some. (Hear, hear)

To that wrong we trace all the great social evils of which we complain today, and we propose to right them by going to the root and removing that wrong. (Loud applause)

It is perfectly clear that we are all here with equal rights to the use of the universe. We are all here equally entitled to the use of land. ...

Capital is wealth produced by labour from land, used again in increasing the production of wealth. And not only will it not hurt labour to leave to capital its full reward but we must leave to capital its full natural reward, if we would have a progressive community – (cheers) – and if we would give each what is his due. (Hear, hear.) What the labourers have to fight against is not competition – (hear hear and “Yes”) – but the restriction of production to their injury. Let there be competition all around from the highest to the lowest, fencing in no class against competition. Abolish monopoly everywhere, put all men on an equal footing and then trust to freedom. In that way we would have the most delicate system of co-operation that can possibly be devised by the wit of man.

The fight of labour is not against capital; it is against monopoly. Why just think of that state of things. when all the means of production belong to the community and all production is regulated by the State, when every individual would have, his work, his time of work, and everything else prescribed for him; when it would be utterly impossible for men to employ themselves! To abolish competition you must have restriction; you must call on the coercive powers of the State. How else are you going to do it? Supposing you organise industry in the way our friends dream of, if any individuals go outside of this organization and propose to compete with it, how are you going to stop their competition but by coming in with the strong arm of the law, and putting an end to it? Why such a state of society, instead of being the ideal to which the Anglo-Saxon community ought to aspire, would be going back to a worse despotism than that of ancient Egypt. (Applause and cries of “No, no.”)  ...

Now we have heard a good deal tonight, as we always do whenever our Socialist friends talk, a great deal about nationalising all the instruments of production, a great deal about making capital the property of the State, and about organising labour by the State; but I have not heard tonight, and I have yet to hear, of any practical steps in this direction. (Hear, hear.) How do they propose to begin, and what will be involved? Here let me say, to interrupt for one moment, that I have never made any proposition to confiscate the railways. What I propose to take is the rent of land for the use of the community; what I propose is to take for the community are all valuable franchises; but I would take nothing that is the product of labour for the use of the community without paying its owner its full value. Now, to take the instruments of production will involve a good deal. (Hear, hear.) The instruments of production comprise not merely the railways, not merely the ships of the steamship lines; they go down to the axe, the spade, and the other tools of the individual workman, and to the stock of the storekeeper. Are you going to take all that? (“Yes.”) It is a big job. (Laughter and applause.)

What was the essence of slavery to which Mr·Hyndman has alluded? The prohibition of competition; so no one else could employ the slave save his owner – the slave was not free to compete with owner. (Hear, hear.) If you men seriously think of these things you will see that the Social Democratic Federation vaguely proposes, if it were possible to carry it out, would inevitably result in the worst system of slavery. (Loud cries of “No; no,” and “Order”)

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

God’s laws do not change. Though their applications may alter with altering conditions, the same principles of right and wrong that hold when men are few and industry is rude also hold amid teeming populations and complex industries. In our cities of millions and our states of scores of millions, in a civilization where the division of labor has gone so far that large numbers are hardly conscious that they are land-users, it still remains true that we are all land animals and can live only on land, and that land is God’s bounty to all, of which no one can be deprived without being murdered, and for which no one can be compelled to pay another without being robbed. But even in a state of society where the elaboration of industry and the increase of permanent improvements have made the need for private possession of land wide-spread, there is no difficulty in conforming individual possession with the equal right to land. For as soon as any piece of land will yield to the possessor a larger return than is had by similar labor on other land a value attaches to it which is shown when it is sold or rented. Thus, the value of the land itself, irrespective of the value of any improvements in or on it, always indicates the precise value of the benefit to which all are entitled in its use, as distinguished from the value which, as producer or successor of a producer, belongs to the possessor in individual right.

To combine the advantages of private possession with the justice of common ownership it is only necessary therefore to take for common uses what value attaches to land irrespective of any exertion of labor on it. The principle is the same as in the case referred to, where a human father leaves equally to his children things not susceptible of specific division or common use. In that case such things would be sold or rented and the value equally applied.

It is on this common-sense principle that we, who term ourselves single-tax men, would have the community act.

We do not propose to assert equal rights to land by keeping land common, letting any one use any part of it at any time. We do not propose the task, impossible in the present state of society, of dividing land in equal shares; still less the yet more impossible task of keeping it so divided.

We propose — leaving land in the private possession of individuals, with full liberty on their part to give, sell or bequeath it — simply to levy on it for public uses a tax that shall equal the annual value of the land itself, irrespective of the use made of it or the improvements on it. And since this would provide amply for the need of public revenues, we would accompany this tax on land values with the repeal of all taxes now levied on the products and processes of industry — which taxes, since they take from the earnings of labor, we hold to be infringements of the right of property.

This we propose, not as a cunning device of human ingenuity, but as a conforming of human regulations to the will of God.

God cannot contradict himself nor impose on his creatures laws that clash.

If it be God’s command to men that they should not steal — that is to say, that they should respect the right of property which each one has in the fruits of his labor;

And if he be also the Father of all men, who in his common bounty has intended all to have equal opportunities for sharing;

Then, in any possible stage of civilization, however elaborate, there must be some way in which the exclusive right to the products of industry may be reconciled with the equal right to land.

If the Almighty be consistent with himself, it cannot be, as say those socialists referred to by you, that in order to secure the equal participation of men in the opportunities of life and labor we must ignore the right of private property. Nor yet can it be, as you yourself in the Encyclical seem to argue, that to secure the right of private property we must ignore the equality of right in the opportunities of life and labor. To say the one thing or the other is equally to deny the harmony of God’s laws.

But, the private possession of land, subject to the payment to the community of the value of any special advantage thus given to the individual, satisfies both laws, securing to all equal participation in the bounty of the Creator and to each the full ownership of the products of his labor. ...

... I have said enough to show your Holiness the injustice into which you fall in classing us, who in seeking virtually to abolish private property in land seek more fully to secure the true rights of property, with those whom you speak of as socialists, who wish to make all property common. But you also do injustice to the socialists.

There are many, it is true, who feeling bitterly the monstrous wrongs of the present distribution of wealth are animated only by a blind hatred of the rich and a fierce desire to destroy existing social adjustments. This class is indeed only less dangerous than those who proclaim that no social improvement is needed or is possible. But it is not fair to confound with them those who, however mistakenly, propose definite schemes of remedy.

The socialists, as I understand them, and as the term has come to apply to anything like a definite theory and not to be vaguely and improperly used to include all who desire social improvement, do not, as you imply, seek the abolition of all private property. Those who do this are properly called communists. What the socialists seek is the state assumption of capital (in which they vaguely and erroneously include land), or more properly speaking, of large capitals, and state management and direction of at least the larger operations of industry. In this way they hope to abolish interest, which they regard as a wrong and an evil; to do away with the gains of exchangers, speculators, contractors and middlemen, which they regard as waste; to do away with the wage system and secure general cooperation; and to prevent competition, which they deem the fundamental cause of the impoverishment of labor. The more moderate of them, without going so far, go in the same direction, and seek some remedy or palliation of the worst forms of poverty by government regulation. The essential character of socialism is that it looks to the extension of the functions of the state for the remedy of social evils; that it would substitute regulation and direction for competition; and intelligent control by organized society for the free play of individual desire and effort.

Though not usually classed as socialists, both the trades-unionists and the protectionists have the same essential character. The trades-unionists seek the increase of wages, the reduction of working-hours and the general improvement in the condition of wage-workers, by organizing them into guilds or associations which shall fix the rates at which they will sell their labor; shall deal as one body with employers in case of dispute; shall use on occasion their necessary weapon, the strike; and shall accumulate funds for such purposes and for the purpose of assisting members when on a strike, or (sometimes) when out of employment. The protectionists seek by governmental prohibitions or taxes on imports to regulate the industry and control the exchanges of each country, so as, they imagine, to diversify home industries and prevent the competition of people of other countries.

At the opposite extreme are the anarchists, a term which, though frequently applied to mere violent destructionists, refers also to those who, seeing the many evils of too much government, regard government in itself as evil, and believe that in the absence of coercive power the mutual interests of men would secure voluntarily what cooperation is needed.

Differing from all these are those for whom I would speak. Believing that the rights of true property are sacred, we would regard forcible communism as robbery that would bring destruction. But we would not be disposed to deny that voluntary communism might be the highest possible state of which men can conceive. Nor do we say that it cannot be possible for mankind to attain it, since among the early Christians and among the religious orders of the Catholic Church we have examples of communistic societies on a small scale. St. Peter and St. Paul, St. Thomas of Aquin and Fra Angelico, the illustrious orders of the Carmelites and Franciscans, the Jesuits, whose heroism carried the cross among the most savage tribes of American forests, the societies that wherever your communion is known have deemed no work of mercy too dangerous or too repellent — were or are communists. Knowing these things we cannot take it on ourselves to say that a social condition may not be possible in which an all-embracing love shall have taken the place of all other motives. But we see that communism is only possible where there exists a general and intense religious faith, and we see that such a state can be reached only through a state of justice. For before a man can be a saint he must first be an honest man.

With both anarchists and socialists, we, who for want of a better term have come to call ourselves single-tax men, fundamentally differ. We regard them as erring in opposite directions — the one in ignoring the social nature of man, the other in ignoring his individual nature. While we see that man is primarily an individual, and that nothing but evil has come or can come from the interference by the state with things that belong to individual action, we also see that he is a social being, or, as Aristotle called him, a political animal, and that the state is requisite to social advance, having an indispensable place in the natural order. Looking on the bodily organism as the analogue of the social organism, and on the proper functions of the state as akin to those that in the human organism are discharged by the conscious intelligence, while the play of individual impulse and interest performs functions akin to those discharged in the bodily organism by the unconscious instincts and involuntary motions, the anarchists seem to us like men who would try to get along without heads and the socialists like men who would try to rule the wonderfully complex and delicate internal relations of their frames by conscious will.

The philosophical anarchists of whom I speak are few in number, and of little practical importance. It is with socialism in its various phases that we have to do battle.

With the socialists we have some points of agreement, for we recognize fully the social nature of man and believe that all monopolies should be held and governed by the state. In these, and in directions where the general health, knowledge, comfort and convenience might be improved, we, too, would extend the functions of the state.

But it seems to us the vice of socialism in all its degrees is its want of radicalism, of going to the root. It takes its theories from those who have sought to justify the impoverishment of the masses, and its advocates generally teach the preposterous and degrading doctrine that slavery was the first condition of labor. It assumes that the tendency of wages to a minimum is the natural law, and seeks to abolish wages; it assumes that the natural result of competition is to grind down workers, and seeks to abolish competition by restrictions, prohibitions and extensions of governing power. Thus mistaking effects for causes, and childishly blaming the stone for hitting it, it wastes strength in striving for remedies that when not worse are futile. Associated though it is in many places with democratic aspiration, yet its essence is the same delusion to which the children of Israel yielded when against the protest of their prophet they insisted on a king; the delusion that has everywhere corrupted democracies and enthroned tyrants — that power over the people can be used for the benefit of the people; that there may be devised machinery that through human agencies will secure for the management of individual affairs more wisdom and more virtue than the people themselves possess. This superficiality and this tendency may be seen in all the phases of socialism.

Take, for instance, protectionism. What support it has, beyond the mere selfish desire of sellers to compel buyers to pay them more than their goods are worth, springs from such superficial ideas as that production, not consumption, is the end of effort; that money is more valuable than money’s-worth, and to sell more profitable than to buy; and above all from a desire to limit competition, springing from an unanalyzing recognition of the phenomena that necessarily follow when men who have the need to labor are deprived by monopoly of access to the natural and indispensable element of all labor. Its methods involve the idea that governments can more wisely direct the expenditure of labor and the investment of capital than can laborers and capitalists, and that the men who control governments will use this power for the general good and not in their own interests. They tend to multiply officials, restrict liberty, invent crimes. They promote perjury, fraud and corruption. And they would, were the theory carried to its logical conclusion, destroy civilization and reduce mankind to savagery.

Take trades-unionism. While within narrow lines trades-unionism promotes the idea of the mutuality of interests, and often helps to raise courage and further political education, and while it has enabled limited bodies of working-men to improve somewhat their condition, and gain, as it were, breathing-space, yet it takes no note of the general causes that determine the conditions of labor, and strives for the elevation of only a small part of the great body by means that cannot help the rest. Aiming at the restriction of competition — the limitation of the right to labor, its methods are like those of an army, which even in a righteous cause are subversive of liberty and liable to abuse, while its weapon, the strike, is destructive in its nature, both to combatants and non-combatants, being a form of passive war. To apply the principle of trades-unions to all industry, as some dream of doing, would be to enthrall men in a caste system.

Or take even such moderate measures as the limitation of working-hours and of the labor of women and children. They are superficial in looking no further than to the eagerness of men and women and little children to work unduly, and in proposing forcibly to restrain overwork while utterly ignoring its cause — the sting of poverty that forces human beings to it. And the methods by which these restraints must be enforced, multiply officials, interfere with personal liberty, tend to corruption, and are liable to abuse.

As for thoroughgoing socialism, which is the more to be honored as having the courage of its convictions, it would carry these vices to full expression. Jumping to conclusions without effort to discover causes, it fails to see that oppression does not come from the nature of capital, but from the wrong that robs labor of capital by divorcing it from land, and that creates a fictitious capital that is really capitalized monopoly. It fails to see that it would be impossible for capital to oppress labor were labor free to the natural material of production; that the wage system in itself springs from mutual convenience, being a form of cooperation in which one of the parties prefers a certain to a contingent result; and that what it calls the “iron law of wages” is not the natural law of wages, but only the law of wages in that unnatural condition in which men are made helpless by being deprived of the materials for life and work. It fails to see that what it mistakes for the evils of competition are really the evils of restricted competition — are due to a one-sided competition to which men are forced when deprived of land. While its methods, the organization of men into industrial armies, the direction and control of all production and exchange by governmental or semi-governmental bureaus, would, if carried to full expression, mean Egyptian despotism.

We differ from the socialists in our diagnosis of the evil and we differ from them as to remedies. We have no fear of capital, regarding it as the natural handmaiden of labor; we look on interest in itself as natural and just; we would set no limit to accumulation, nor impose on the rich any burden that is not equally placed on the poor; we see no evil in competition, but deem unrestricted competition to be as necessary to the health of the industrial and social organism as the free circulation of the blood is to the health of the bodily organism — to be the agency whereby the fullest cooperation is to be secured. We would simply take for the community what belongs to the community, the value that attaches to land by the growth of the community; leave sacredly to the individual all that belongs to the individual; and, treating necessary monopolies as functions of the state, abolish all restrictions and prohibitions save those required for public health, safety, morals and convenience.

But the fundamental difference — the difference I ask your Holiness specially to note, is in this: socialism in all its phases looks on the evils of our civilization as springing from the inadequacy or inharmony of natural relations, which must be artificially organized or improved. In its idea there devolves on the state the necessity of intelligently organizing the industrial relations of men; the construction, as it were, of a great machine whose complicated parts shall properly work together under the direction of human intelligence. This is the reason why socialism tends toward atheism. Failing to see the order and symmetry of natural law, it fails to recognize God.

On the other hand, we who call ourselves single-tax men (a name which expresses merely our practical propositions) see in the social and industrial relations of men not a machine which requires construction, but an organism which needs only to be suffered to grow. We see in the natural social and industrial laws such harmony as we see in the adjustments of the human body, and that as far transcends the power of man’s intelligence to order and direct as it is beyond man’s intelligence to order and direct the vital movements of his frame. We see in these social and industrial laws so close a relation to the moral law as must spring from the same Authorship, and that proves the moral law to be the sure guide of man where his intelligence would wander and go astray. Thus, to us, all that is needed to remedy the evils of our time is to do justice and give freedom. This is the reason why our beliefs tend toward, nay are indeed the only beliefs consistent with a firm and reverent faith in God, and with the recognition of his law as the supreme law which men must follow if they would secure prosperity and avoid destruction. This is the reason why to us political economy only serves to show the depth of wisdom in the simple truths which common people heard gladly from the lips of Him of whom it was said with wonder, “Is not this the Carpenter of Nazareth?”

And it is because that in what we propose — the securing to all men of equal natural opportunities for the exercise of their powers and the removal of all legal restriction on the legitimate exercise of those powers — we see the conformation of human law to the moral law, that we hold with confidence that this is not merely the sufficient remedy for all the evils you so strikingly portray, but that it is the only possible remedy.

Nor is there any other. The organization of man is such, his relations to the world in which he is placed are such — that is to say, the immutable laws of God are such, that it is beyond the power of human ingenuity to devise any way by which the evils born of the injustice that robs men of their birthright can be removed otherwise than by doing justice, by opening to all the bounty that God has provided for all.

Since man can live only on land and from land, since land is the reservoir of matter and force from which man’s body itself is taken, and on which he must draw for all that he can produce, does it not irresistibly follow that to give the land in ownership to some men and to deny to others all right to it is to divide mankind into the rich and the poor, the privileged and the helpless? Does it not follow that those who have no rights to the use of land can live only by selling their power to labor to those who own the land? Does it not follow that what the socialists call “the iron law of wages,” what the political economists term “the tendency of wages to a minimum,” must take from the landless masses — the mere laborers, who of themselves have no power to use their labor — all the benefits of any possible advance or improvement that does not alter this unjust division of land? For having no power to employ themselves, they must, either as labor-sellers or as land-renters, compete with one another for permission to labor. This competition with one another of men shut out from God’s inexhaustible storehouse has no limit but starvation, and must ultimately force wages to their lowest point, the point at which life can just be maintained and reproduction carried on. ...

You state that you approach the subject with confidence, yet in all that greater part of the Encyclical (19-67) devoted to the remedy, while there is an abundance of moral reflections and injunctions, excellent in themselves but dead and meaningless as you apply them, the only definite practical proposals for the improvement of the condition of labor are:

1. That the state should step in to prevent overwork, to restrict the employment of women and children, to secure in workshops conditions not unfavorable to health and morals, and, at least where there is danger of insufficient wages provoking strikes, to regulate wages (39-40).

2. That it should encourage the acquisition of property (in land) by working-men (50-51).

3. That working-men’s associations should be formed (52-67). These remedies so far as they go are socialistic, and though the Encyclical is not without recognition of the individual character of man and of the priority of the individual and the family to the state, yet the whole tendency and spirit of its remedial suggestions lean unmistakably to socialism — extremely moderate socialism it is true; socialism hampered and emasculated by a supreme respect for private possessions; yet socialism still. But, although you frequently use the ambiguous term “private property” when the context shows that you have in mind private property in land, the one thing clear on the surface and becoming clearer still with examination is that you insist that whatever else may be done, the private ownership of land shall be left untouched. ... 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)

Co-operation and Competition

MANY if not most of the writers on political economy have treated exchange as a part of distribution. On the contrary, it belongs to production. It is by exchange, and through exchange, that man obtains, and is able to exert, the power of co-operation which, with the advance of civilization, so enormously increases his ability to produce wealth. — The Science of Political Economy — unabridged: Book III, Chapter 11, The Production of Wealth: The Office of Exchange in Production • unabridged Chapter 9, The Office of Exchange in Production

THEY who, seeing how men are forced by competition to the extreme of human wretchedness, jump to the conclusion that competition should be abolished, are like those who, seeing a house burn down, would prohibit the use of fire.

The air we breathe exerts upon every square inch of our bodies a pressure of fifteen pounds. Were this pressure exerted only on one side, it would pin us to the ground and crush us to a jelly. But being exerted on all sides, we move under it with perfect freedom. It not only does not inconvenience us, but it serves such indispensable purposes that, relieved of its pressure, we should die.

So it is with competition. Where there exists a class denied all right to the element necessary to life arid labor, competition is one-sided, and as population increases must press the lowest class into virtual slavery, and even starvation. But where the natural rights of all are secured, then competition, acting on every hand — between employers as between employed, between buyers as between sellers — can injure no one.

On the contrary it becomes the most simple, most extensive, most elastic, and most refined system of co-operation that, in the present stage of social development, and in the domain where it will freely act, we can rely on for the co-ordination of industry and the economizing of social forces.

In short, competition plays just such a part in the social organism as those vital impulses which are beneath consciousness do in the bodily organism. With it, as with them, it is only necessary that it should be free. The line at which the state should come in is that where free competition becomes impossible — a line analogous to that which in the individual organism separates the conscious from the unconscious functions. There is such a line, though extreme socialists and extreme individualists both ignore it. The extreme individualist is like the man who would have his hunger provide him food; the extreme socialist is like the man who would have his conscious will direct his stomach how to digest it. — Protection or Free Trade, chapter 28 econlib

IMAGINE an aggregation of men which it was attempted to secure by the external direction involved in socialistic theories that division of labor which grows, up naturally in society where men are left free. For the intelligent direction thus required an individual man or individual men must be selected, for even if there be angels and archangels in the world that is invisible to us, they are not at our command. Taking no note of the difficulties which universal experience shows always to attend the choice of the depositories of power, and ignoring the inevitable tendency to tyranny and oppression, of command over the actions of others, simply consider, even if the very wisest and best of men were selected for such purposes, the task that would be put upon them in the ordering of the when, where, how and by whom, that would be involved in the intelligent direction and supervision of the almost infinitely complex and constantly changing relations and adjustments involved in such division of labor as goes on in a civilized community. It is evidently as much beyond the ability of conscious direction as the correlation of the processes that maintain the human body in health and vigor is beyond it. — The Science of Political Economy unabridged: Book III, Chapter 10, The Production of Wealth: Cooperation — Its Two Kinds • abridged: Part III, Chapter 8, Cooperation: Its Two Kinds

THE ideal of socialism is grand and noble; and it is, I am convinced, possible of realization, but such a state of society cannot be manufactured — it must grow. Society is an organism, not a machine. It can only live by the individual life of its parts. And in the free and natural development of all the parts will be secured the harmony of the whole. — Progress & Poverty — Book VI, Chapter 1, The Remedy: The Insufficiency of Remedies Currently Advocated; V.—From Governmental Direction and Interference

SOCIALISM in all its phases looks on the evils of our civilization as springing from the inadequacy or in harmony of natural relations, which must be artificially organized or improved. In its idea there devolves on the State the necessity of intelligently organizing the industrial relations of men, the construction as it were of a great machine, whose complicated parts shall properly work together under the direction of human intelligence. — The Condition of Labor, an Open Letter to Pope Leo XIII 

IN socialism as distinguished from individualism there is an unquestionable truth — and that a truth to which (especially by those most identified with free-trade principles) too little attention has been paid. Man is primarily an individual — a separate entity, differing from his fellows in desires and powers, and requiring for the exercise of those powers and the gratification of those desires individual play and freedom. But he is also a social being, having desires that harmonize with those of his fellows, and powers that can only be brought out in concerted action. There is thus a domain of individual action and a domain of social action — some things which can best be done when each acts for himself, and some things which can best be done when society acts for all its members. And the natural tendency of advancing civilization is to make social conditions relatively more important, and more and more to enlarge the domain of social action. This has not been sufficiently regarded, and at the present time, evil unquestionably results from leaving to individual action functions that by reason of the growth of society and the developments of the arts have passed into the domain of social action; just as, on the other hand, evil unquestionably results from social interference with what properly belongs to the individual. Society ought not to leave the telegraph and the railway to the management and control of individuals; nor yet ought society to step in and collect individual debts or attempt to direct individual industry. — Protection or Free Trade, Chapter 28 econlib

THE primary purpose and end of government being to secure the natural rights and equal liberty of each, all businesses that involve monopoly are within the necessary province of governmental regulation, and businesses that are in their nature complete monopolies become properly functions of the State. As society develops, the State must assume these functions, in their nature co-operative, in order to secure the equal rights and liberty of all. That is to say, as, in the process of integration, the individual becomes more and more dependent upon and subordinate to the all, it becomes necessary for government, which is properly that social organ by which alone the whole body of individuals can act, to take upon itself, in the interest of all, certain functions which cannot safely be left to individuals. — Social Problems — Chapter 17, The Functions of Government

IT is not the business of government to make men virtuous or religious, or to preserve the fool from the consequences of his own folly. Government should be repressive no further than is necessary to secure liberty by protecting the equal rights of each from aggression on the part of others, and the moment governmental prohibitions extend beyond this line they are in danger of defeating the very ends they are intended to serve.— Social Problems — Chapter 17, The Functions of Government

ALL schemes for securing equality in the conditions of men by placing the distribution of wealth in the hands of government have the fatal defect of beginning at the wrong end. They pre-suppose pure government; but it is not government that makes society; it is society that makes government; and until there is something like substantial equality in the distribution of wealth, we cannot expect pure government. — Protection or Free Trade, Chapter 28 econlib

... go to "Gems from George"

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

Note 49: The primary error in all forms of socialism consists in ignoring the fact that Capital is but a product of labor and land; or what in effect is the same thing, in disregarding the necessary inference that land is the only implement of labor. Intelligent socialists insist that they do not ignore it; but that, while acknowledging land to be the primary implement of labor, they see in this only an abstract formula, having at the present stage of civilization no practical importance. Society, they urge, is impossible without Capital; and he who would live in society must have Capital, or be the slave of those who do have it. Therefore, they, argue, Capital is in the social state as indispensable as land. Their reasoning hinges upon the mistaken assumption that Capital is an accumulation of the past instead of being a product of the present. As one socialistic author puts it, "Though labor may originally have preceded Capital, yet it is now as absurd to place one before the other as it is to attempt to say whether the hen originates the egg or the egg the hen." The explanation of division of labor and trade. the effect of which is overlooked by socialistic philosophies, affords a better opportunity than the present for considering this elementary error of socialism, and a brief discussion of the subject will be given in that connection. See post, note 81. ...

Note 81: People with socialistic tendencies argue that while it is true that Labor and Land are the only things necessary in primitive conditions, Capital also is necessary in civilized conditions. (See ante, notes 49 and 58.) And they want to know, with something like a sneer, what clerks and mechanics and bookkeepers and other specialists in our highly organized industry would do with land even if it were freely open to them. "They don't know how to make food, and they can't eat sand!" I once heard a socialist exclaim. The same notion is widespread among that large class of single tax opponents in church and college, whom the late Wm. T. Croasdale described as "people who believe in socialism, but don't believe in putting it into practice."

The idea is best expressed perhaps by a writer of the most brilliant socialistic verses, Charlotte Perkins Stetson, in the following :

"Free land is not enough. In earliest days
When man, the baby, from the earth's bare breast
Drew for himself his simple sustenance,
Then freedom and his effort were enough.
The world to which a man is born to-day
Is a constructed, human, man-built world.
As the first savage needed the free wood,
We need the road, the ship, the bridge, the house,
The government, society, and church, —
These are the basis of our life to-day
As much necessities to modern man
As was the forest to his ancestor.
To say to the newborn, 'Take here your land;
In primal freedom settle where you will,
And work your own salvation in the world
Is but to put the last-come upon earth
Back with the dim fore-runners of his race,
To climb the race's stairway in one life
Allied society owes to the young—
The new men come to carry on the world—
Account for all the past, the deeds, the keys,
Full access to the riches of the earth.
Why? That these new ones may not be compelled
Each for himself to do our work again ;
But reach their manhood even with to-day,
And gain to-morrow sooner.
To go on,—
To start from where we are and go ahead
That is true progress, true humanity."—In This Our World.

If one man were turned loose alone upon the earth, or shut off from trading with his fellows, it might in great degree be true, as Mrs. Stetson says, that he would be put "back with the dim forerunners of his race, to climb the race's stairway in one life"; but her criticism does not apply to millions of free men who freely trade. To them the land would be enough. Even though they were denied existing roads and ships and bridges and houses, they would soon make new ones, and starting "from where we are," would "go ahead." For free land means access to all natural materials and forces, and free trade means unobstructed industrial intercourse between laborer and laborer. These are the essential conditions, the only conditions, of all production — even of the most civilized.

The root of the socialistic idea is the thought that we are dependent for social life upon accumulated capital. This is a mistake. Social life depends, not upon accumulated capital, but upon accumulated knowledge made effective by interchange of labor. A laborer who operates some great machine seems to be dependent upon the owner of his machine for opportunity to work; but the only people upon whom he really depends are laborers who are competent co-operatively to make such machines, and who have access to both the land from which the materials must be drawn and that upon which they must group themselves while doing the work. When socialists lay stress upon the importance of accumulated capital they are attributing to accumulated capital the power that resides in land and trade; for to control these is to command the benefits of accumulated knowledge.

Since the production of a machine precedes its use, the inference is almost irresistible, upon a superficial consideration, that opportunities to labor and compensation for labor are governed by the existing supplies of machinery to which labor is allowed access. But this is of a piece with the old notion of classical political economy that opportunities to labor are dependent upon the existing supplies of subsistence that are devoted to the maintenance of laborers. The inference is wrong in either form. When we once grasp the essential truth of the law illustrated in the text, that the production of subsistence, or machinery, or any other unfinished object, that is to say, of Capital, is but a form of general wealth production, and that all forms of wealth production are in obedience to demand, we clearly see that labor is in no respect dependent upon capital either for employment or compensation. In the social as in the solitary state, Labor and Land are the only factors of wealth production. It is not Capital but Land that supplies materials to Labor for its subsistence and its machinery. Instead of capitalists supplying laborers with subsistence and machinery, laborers themselves continuously produce subsistence and machinery from the materials that land supplies. Capitalists neither employ nor pay laborers; laborers employ and pay one another.

Read "Progress and Poverty," book i, chs. iii, iv, and v. Also read "The Story of My Dictatorship" (No. 4, Sterling Library), chs. v, vi, vii, and viii. ...

c. Significance of the Upward Tendency of Rent

Now, what is the meaning of this tendency of Rent to rise with social progress, while Wages tend to fall? Is it not a plain promise that if Rent be treated as common property, advances in productive power shall be steps in the direction of realizing through orderly and natural growth those grand conceptions of both the socialist and the individualist, which in the present condition of society are justly ranked as Utopian? Is it not likewise a plain warning that if Rent be treated as private property, advances in productive power will be steps in the direction of making slaves of the many laborers, and masters of a few land-owners? Does it not mean that common ownership of Rent is in harmony with natural law, and that its private appropriation is disorderly and degrading? When the cause of Rent and the tendency illustrated in the preceding chart are considered in connection with the self-evident truth that God made the earth for common use and not for private monopoly, how can a contrary inference hold? Caused and increased by social growth, 97 the benefits of which should be common, and attaching to land, the just right to which is equal, Rent must be the natural fund for public expenses. 98

97. Here, far away from civilization, is a solitary settler. Getting no benefits from government, he needs no public revenues, and none of the land about him has any value. Another settler comes, and another, until a village appears. Some public revenue is then required. Not much, but some. And the land has a little value, only a little; perhaps just enough to equal the need for public revenue. The village becomes a town. More revenues are needed, and land values are higher. It becomes a city. The public revenues required are enormous, and so are the land values.

98. Society, and society alone, causes Rent. Rising with the rise, advancing with the growth, and receding with the decline of society, it measures the earning power of society as a whole as distinguished from that of the individuals. Wages, on the other hand, measure the earning power of the individuals as distinguished from that of society as a whole. We have distinguished the parts into which Wealth is distributed as Wages and Rent; but it would be correct, indeed it is the same thing, to regard all wealth as earnings, and to distinguish the two kinds as Communal Earnings and Individual Earnings. How, then, can there be any question as to the fund from which society should be supported? How can it be justly supported in any other way than out of its own earnings?

If there be at all such a thing as design in the universe — and who can doubt it? — then has it been designed that Rent, the earnings of the community, shall be retained for the support of the community, and that Wages, the earnings of the individual, shall be left to the individual in proportion to the value of his service. This is the divine law, whether we trace it through complex moral and economic relations, or find it in the eighth commandment.

... read the book

William F. Buckley, Jr.  Henry George and the Single Tax  (on C-SPAN's Book Notes)

But what we are presented with, from Right to Left, is not a coordinated structure embodying the best elements from both sides, not even a well-thought-out attempt at syncretism, but rather a bewildering welter of jerry-built solutions, each one based on political and emotional considerations and lacking any functional relationship to a unified system of socio-economic truth -- let alone any rootage in a grand scheme of teleology or ethics.

A little Socialism here, and a little Capitalism there; a concern for the public sector here, and a concession to the profit motive there; a sop to the "underprivileged" here, and a bow to incentive there - put them all together, and what have you got? Nothing but a great big rag-bag, a haphazard pastiche of odds and ends without any bones and without any guts!

Nevertheless, there is a Middle Way. There is a body of socio-economic truth which incorporates the best insights of both Capitalism and Socialism. Yet they are not insights that are artificially woven together to form a deliberate compromise. Instead, they arise naturally, with a kind of inner logic, from the profound ethical distinction which is the system's core. They arise remorselessly from an understanding of the meaning of the commandment: "Thou shalt not steal." This Middle Way is the philosophy associated with the name of Henry George.

I like to picture economic theory as a vast jigsaw puzzle distributed across two tables, one called Capitalism and the other, Socialism. But mingled with the genuine pieces of the puzzle are many false pieces, also distributed across both tables. Most of us are either perceptively limited to one table, or else we are unable to distinguish the genuine pieces from the false. But Henry George knew how to find the right pieces, and, therefore, he was able to put the puzzle together -- at least in its general outlines. I don't claim that he was infallible, or that there isn't further work to be done. Yet if I find a little piece of puzzle missing here or there, it doesn't shake my confidence in the harmony of the overall pattern he discerned. It doesn't make me want to sweep the puzzle onto the floor and start all over again from scratch.

Henry George was born in 1839 in Philadelphia, and died in 1897 in New York City. It was in the San Francisco of the 1870s that he wrote his masterwork, Progress and Poverty.  ...

Among books of nonfiction, its sale was for many decades exceeded only by the Bible. At Oxford University, in the English literature department, it is used as a model of the finest prose. ...

His genius has been glowingly acknowledged by such renowned figures as philosophers John Dewey and Mortimer J. Adler, presidents Woodrow Wilson and Dwight D. Eisenhower, scientists Alfred Russel Wallace and Albert Einstein, essayists John Ruskin and Albert Jay Nock, jurists Louis D. Brandeis and Samuel Seabury, columnists William F. Buckley and Michael Kinsley, and statesmen Winston Churchill and Sun Yat-sen. These names cover the entire political spectrum from Conservative to Liberal, yet all of them saw something of immense value in George's thought. ...

For a long time, it was the fashion among academic economists to ignore or patronize Henry George -- whether for his lack of formal credentials, for his propensity to mingle moral arguments with economic ones, or for other perceived intellectual crimes even more monstrous. Today, this is becoming less and less the case, although, of course, there were honorable exceptions from the outset. But now we find economists of every stripe, including at least four Nobel laureates, united in agreement that George has much to say that is of vital contemporary importance. The list is far too long to read in its entirety, but it includes such names as Gary Becker, Kenneth Boulding, James Buchanan, Milton Friedman, Mason Gaffney, Lowell Harriss, Alfred Kahn, Arthur Laffer, Franco Modigliani, Warren Samuels, Robert Solow, James Tobin, and William Vickrey -- the last of whom served recently as president of the American Economic Association.

We will begin with the Capitalist table. George considered himself a purifier of Capitalism, not its enemy. He built upon the foundations laid by the classical economists. The skeleton of his system is essentially Capitalist. In fact, Karl Marx referred to George's teaching as "Capitalism's last ditch." George believed in competition, in the free market, in the unrestricted operation of the laws of supply and demand. He distrusted government and despised bureaucracy. He was no egalitarian leveler; the only equality he sought was equal freedom of opportunity. Actually, what he intended was to make free enterprise truly free, by ridding it of the monopolistic hobbles which prevent its effective operation.

In his book, The Condition of Labor, George said: "We differ from the Socialists in our diagnosis of the evil, and we differ from them in remedies. We have no fear of capital, regarding it as the natural handmaiden of labor; we look on interest in itself as natural and just; we would set no limit to accumulation, nor impose on the rich any burden that is not equally placed on the poor; we see no evil in competition, but deem unrestricted competition to be as necessary to the health of the industrial and social organism as the free circulation of the blood is to the bodily organism — to be the agency whereby the fullest cooperation is to be secured."

Upton Sinclair: The Consequences of Land Speculation are Tenantry and Debt on the Farms, and Slums and Luxury in the Cities

The speculator who bought this land thinks that he deserves the increase, because he guessed the fact that the city was going to grow that way. But it seems clear enough that his skill in guessing which way the community was going to grow, however useful that skill may be to himself, is not in any way useful to the community. The man may have planted trees, or built roads, and put in sidewalks and sewers; all that is useful work, and for that he should be paid. But should he be paid for guessing what the rest of us were going to need?

Before you answer, consider the consequences of this guessing game. The consequences of land speculation are tenantry and debt on the farms, and slums and luxury in the cities. A great part of the necessary land is held out of use, and so the value of all land continually increases, until the poor man can no longer own a home. The value of farm land also increases; so year by year more independent farmers are dispossessed, because they cannot pay interest on their mortgages. So the land becomes a place of serfdom, that land described by the poet, "where wealth accumulates and men decay." The great cities fill up with festering slums, and a small class of idle parasites are provided with enormous fortunes, which they do not have to earn, and which they cannot intelligently spend.

This condition wrecked every empire in the history of mankind, and it is wrecking modern civilization. One of the first to perceive this was Henry George, and he worked out the program known as the Single Tax. Let society as a whole take the full rental value of land, so that no one would any longer be able to hold land out of use. So the value of land would decrease, and everyone could have land, and the community would have a great income to be spent for social ends. ...

In Philadelphia, as in all our great cities, are enormously wealthy families, living on hereditary incomes derived from crowded slums. Here and there among these rich men is one who realizes that he has not earned what he is consuming, and that it has not brought him happiness, and is bringing still less to his children. Such men are casting about for ways to invest their money without breeding idleness and parasitism. Some of them might be grateful to learn about this enclave plan, and to visit the lovely village of Arden, and see what its people are doing to make possible a peaceful and joyous life, even in this land of bootleggers and jazz orchestras. ... read the whole article

• Was this accumulated capital honestly earned in a free and a fair market?
• Was there no monopolistic privilege?
• Was there the creation of real wealth or was there merely the gaining of speculative profits?

Judge Samuel Seabury: An Address delivered upon the 100th anniversary of the birth of Henry George

WE are met to celebrate the 100th anniversary of the birth of Henry George. We meet, therefore, in a spirit of joy and thanksgiving for the great life which he devoted to the service of humanity. To very few of the children of men is it given to act the part of a great teacher who makes an outstanding contribution toward revealing the basic principles to which human society must adhere if it is to walk in the way which leads to freedom. This Henry George did, and in so doing he expressed himself with a clarity of thought and diction which has rarely been surpassed. ...

Henry George's teachings involved more than the prescription of specific remedies for particular evils. The specific remedies which he proposed were means to an end. The end was the philosophy of freedom as applied to human relations. I do not say that the majority of the people of the world have given acceptance to many of his most important teachings. Indeed, in view of the world tendency since his death to aggrandize the powers of the political state and limit and subordinate the power of the people, it is self-evident that in this environment the principles of Henry George could not have won general acceptance. Had they done so, the world would have made greater progress toward the attainment of the goal of human freedom and economic contentment which is still the unrealized aspiration of humanity.

Moreover, many who have believed in the necessity for basic social changes preferred to ignore the simple and fundamental teachings of Henry George, and to adopt, instead, the philosophy of Marx and Lenin. It is the wide acceptance of the doctrines of these false prophets which has contributed to making the economic condition of the masses worse, has reduced their standard of living and has made of Europe an armed camp. It is their disciples who are now attempting to introduce here the political and economic theories which in other countries have culminated in the totalitarian state, together with the host of iniquities which are inseparably connected with it. ... read the whole speech

Lindy Davies: Socialism, Capitalism and Geoism

Clarence Darrow: The Land Belongs To The People (1916)

... Now, there are some methods of getting access to the earth which are easier than others. The easiest, perhaps, that has been contrived is by means of taxation of the land values and land values alone; and I need only say a little upon that question. One trouble with it which makes it almost impossible to achieve, is that it is so simple and so easy. You cannot get people to do anything that is simple; they want it complex so they can be fooled.

Now the theory of Henry George and of those who really believe in the common ownership of land is that the public should take not alone taxation from the land, but the public should take to itself the whole value of the land that has been created by the public — should take it all. It should be a part of the public wealth, should be used for public improvements, for pensions, and belong to the people who create the wealth — which is a strange doctrine in these strange times. It can be done simply and easily; it can be done by taxation. All the wealth created by the public could be taken back by the public and then poverty would disappear, most of it at least. The method is so simple, and so legal even — sometimes a thing is legal if it is simple — that it is the easiest substantial reform for men to accomplish, and when it is done this great problem of poverty, the problem of the ages, will be almost solved. We may need go farther.

Henry George said, in "Progress and Poverty" that while the land tax may not bring about the dream of the socialist, it would still prepare the way for that — or for any dream. ... read the whole article

Some of our unresolved problems today include

• rising homelessness, the counterpart of low affordability of housing. This problem persists in spite of massive subsidies and tax breaks for housing that make America "overhoused" next to, say, Japan.
• Unemployment persists.
• Income and especially wealth are distributed with increasing inequality.
• American industry grows obsolescent faced with foreign competition: replacement is too slow, as in later 19th Century Britain. Britain then at least saved and exported capital, but America's net domestic capital formation is dangerously weak, leading to capital imports and alienation of American wealth.
• Real wage rates are level or falling.
• Crime rates are frightening, with many Americans choosing to live in an underground economy.
• Anomie and substance abuse are everywhere.
• National security hangs on precarious foreign oil.
• A large piece of our financial system has just collapsed, and the rest looks shaky.

There is much to be humble and concerned about.

Not only can you have both common land and free markets, you can't have one without the other. They go together, like love and marriage. You need market prices to help identify land's taxable surplus, which is the net product of land after deducting the human costs of using it. At the same time, you must support government from land revenues to have a truly free market, because otherwise you will raise taxes from production, trade, and capital formation, interfering with free markets. If you learn this second point, and act on it, you will have a much freer market than any of the OECD nations that now presume to instruct you, and that are campaigning vigorously to make all nations in the world "harmonize" their taxes to conform with their own abysmal systems.

• polluting air and water,
• wasting water,
• cutting timber whose value is less than the cost of logging, or
• populating remote regions whose costs exceed the benefits derived.

Jeff Smith: What the Left Must Do: Share the Surplus

Demanding jobs rather than a fair share of society’s surplus implies that there is no commonwealth or that expropriating it by a few is OK. Neither is true. Rents are real, and they are ours. There is a free lunch (just ask the privileged), as those downing it do get money for nothing. And since society, not lone owners, generates these values, that flow of funds belongs to everyone.

The value of a parcel of land is initially based on the natural endowments of the location (“location, location, location”), created not by an owner but by whatever created all of us. Next, land value rises with the presence of society, and grows with the population of society. It’s highest where society is densest, in the city centers, typically 2000 times more valuable than sites in the boondocks. Land values as economic values disappear whenever society quits respecting one’s claim, as in a war zone; there, real estate offices nimbly shut down. And while land titles may be the holy grail of wannabe homeowners, they’re also the ticket to pocket unearned rent by absentee landlords, such as Donald Trump.

Making land public does not guarantee that the public end up with the rent. The public’s steward, the state, often lets public resources at “fire-sale” prices, unduly enriching Chevron, Arco, Kerr-McGee, Weyerhauser, etc. The state gifts enormously valuable licenses for TV, radio, and cell phones to GE, Disney, Time Warner, and Clear Channel. The metaphor, “field of knowledge”, lets us see patents and copyrights as flags; by excluding innovative outsiders, they not only skew techno-progress (thus addicting civilization to oil) but also enrich those few who can afford to corral them: GM, DuPont, and Microsoft. Similarly, a utility franchise lets AT&T pay investors, and Enron insiders, handsomely.  ...

That’s how great fortunes are made: by sloughing off private costs (which become “negative externalities”) while soaking up public benefits (some “positive externalities”). Land titles, corporate charters, and other privileges – mere pieces of paper – are worth trillions each year. The corporations – from the Federal Reserve to Exxon (both founded by the “oiligarchy”) – that receive these privileges make their owners rich or richer. Their wealth is not compensation for the exertions of either labor or capital, not profit in the market from output, but rent from present lobbying of legislatures or past conquest of others’ lands. Thus laws (“privilege” means “private law”) funnel multi-trillions of dollars each year from the many to the few.

Rentiers become the elite or rise higher up among the upper echelon, the puppeteers of our puppet state. Their ranks grow with every techno-advance that spurs a new monopoly and pushes up locational values. ...

Trillions are enough money that the present beneficiaries spend fortunes on electing their water boys to Congress and state legislatures. Why do public servants agree to let public assets go for peanuts? Partly out of habit, partly because the recipients contribute mightily to their political campaigns, but also.

Well, not exactly “always”. Once there was a powerful movement to shift taxes off wages, onto rents. It was not Marxism, eventho’ one of the first demands in the Communist Manifesto was to tax land (acknowledging the history of the enclosures of farmland which forced surplus labor to work cheap in the then new factories in cities). It was the movement of the Single Tax on land, spearheaded by Henry George.

George, author of the classic, Progress and Poverty (1879, in its day more popular than Das Kapital), was Labor’s candidate for the mayoralty of New York in 1886, an election he won but a victory he was denied by the machinations of Tammany Hall. Samuel Gompers (1850-1924), union organizer who campaigned for George, said,

Most economists deem it their business to evaluate the efficiency of policy choices, but, claiming no special knowledge of ethics, they leave it to philosophers and the political process to evaluate questions of justice. Can it be true that society's arrangements to provide for common needs must always confront a divisive choice between equity and efficiency - between what is fair and what is feasible?

Henry George not only denied it; he asserted the reverse: Full recognition of economic rights and responsibilities would reveal the goals of equity and efficiency to be mutually reinforcing. Neither social justice nor a well-functioning free market system can long be enjoyed without the other. "The laws of the universe are harmonious," George proclaimed. His analysis showed that the root cause of widening inequality lies not in the laws of nature, but in social maladjustments which ignore them. Moreover, the breach of justice which underlies the problem of poverty is not merely incidental to economic development; it impedes development, leading to wider and wider inequality.

George emphasized that unequal distribution is itself wasteful of wealth.

Unemployment and underemployment of labor mean that energy and intelligence go untapped. For those who find work, he said, high wages stimulate creativity, invention, and improvement, while low wages encourage carelessness. Inadequate education of the poor multiplies the loss. There are the damages done by poverty-related vice and crime, and the substantial costs of protecting society against them. There is the burden upon the wealthy of providing welfare support for the very poor - or risking social upheaval if they do not. Moreover, said George, social institutions by which some prosper at others' expense cause talent and resources to be diverted from productive enterprise to unproductive conflict, as individuals find that competing for political advantage can be more lucrative than competing for market success.

In short, an unjust system of privileges and entitlements tends to cause misallocation of resources, macroeconomic instability and stagnation, political corruption, and social conflict that ultimately may threaten whole civilizations.

George's central contribution was to show that the distinction between individual property and common property forms a rational basis for distinguishing the domain of public activity from that of the private. This distinction leads him to a theory of public finance that reconciles the competing insights of socialism and laissez-faire capitalism. By a simple fiscal device, the revenue arising from common property can be captured for the public treasury and applied to the common benefit, so that government may assume needed general functions without interfering with individual incentives.

• The benefits of sustained economic development would be widely shared.
• The limited resources of the earth would be managed for the benefit of all, including future generations.
• Government would become, not a repressive power, but "the administration of a great cooperative society.
• It would become merely the agency by which the common property was administered for the common benefit."

George's insights have wide application to modern problems. Both domestically and internationally, the distribution of wealth has grown more unequal. Europe, North America, and Japan have surged ahead while many poorer countries have stagnated or declined, many burdened by debt.

Modern fiscal and monetary policies have not resolved the problem of macroeconomic fluctuations. Yet a half century before Keynes, George outlined a theory of boom and bust which explained the underlying instability of the market economy under present fiscal institutions. The operation of a modern system of money and credit merely serves to intensify that instability. His theory is consistent with the circumstances of numerous episodes, recently including Japan's recession and halting recovery, and the savings and loan debacle in the United States.

Georgist (or "geoclassical") economic analysis

• bears directly upon the current difficulties of Russia and other nations emerging from communism, upon the international debt crisis, and upon the world-wide pressure on environmental and natural resources.
• It is relevant to the common experience of chronic budget deficits, both municipal and federal.
• It can be applied to the problems of corruption in government, and of the concentration of political power associated with concentration of wealth.
• It provides an ideal framework for the analysis of environmental pollution and the design of environmental policy.
• Indeed, readers will notice that the modern environmental movement in certain respects seems to be grappling toward a rediscovery of Georgist proposals.

Many American cities are plagued by the twin problems of urban decay and suburban sprawl. An expanding network of roads and highways carries commuters ever farther to their jobs. Fleeing the problems of the city, citizens build new homes in the quiet countryside only to find that traffic congestion, pollution, noise and urban social problems are flung outward with the movement of population. Sociologists decry the loss of community, while environmentalists warn of the potentially disastrous consequences of automobile pollution, habitat loss, deforestation and ecosystem disruption. Economists point to the billions of dollars worth of wasted physical and human capital left behind in the crumbling central cities - where the urban poor remain stranded to fend for themselves, with few jobs and, as municipal tax revenues shrink, declining public services. Yet several years before the automobile appeared, Henry George analyzed the dynamics of urban growth and decay. He explained the basic processes that yield an inappropriate geographic distribution of population, inefficient land use, and urban blight. Enlightened urban economists and transportation planners today advocate Georgist policy reforms at the municipal level.

Thus, George's synthesis informs a research program of remarkable breadth. Some writers understand Georgism to constitute a distinct paradigm of political economy, one which reconciles the contradictions between the two competing paradigms dominant in the world today - the mainstream neoclassical school, which tends to focus on the impressive efficiency properties of free markets, and Marxist socialism. Other Georgist writers believe that Georgism can and should be explained in the modern language of neoclassical economics. What is certain is that geoclassical thought bears crucially on some of the foremost controversies in America and the world today.  Read the whole article

Tony Vickers: From Zee to Vee: using property tax assessments to monitor the economic landscape