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neoclassical economists' view of
their proper role is rather like that in The Realtor's Oath, which
includes a vow 'To protect the individual right of real estate
ownership.' The word 'individual' is construed broadly to include
corporations, estates, trusts, anonymous offshore funds, schools,
government agencies, institutions, partnerships, cooperatives, the Duke
of Westminster, the Sultan of Brunei, the Medellin Cartel, Saddam
Hussein, congregations, Archbishops, families (including criminal
families) and so on, but 'individual' sounds more all-American and
subsumes them all. This is a potent chant that stirs people to extremes
of self-righteousness and siege mentality when challenged." - Professor Mason Gaffney, US Geonomic
We are land creatures. None of us was born with a hot air balloon on our backs. Should some of us be able to accumulate land, charge others for access to it, and keep that rent as their personal treasure? Are some of us more entitled to land than others, as an accident of birth, or do we all come into the world created equal with respect to the natural creation, natural resources and natural opportunities to work?
When you hear about large ranches in California, Texas and other places, or a few landholders — including philanthropic entities, universities, families or real estate investment trusts — controlling significant percentages of the best land in a locality, think of these effects on the lives of all the non-owners humans who also live and/or work in the area: their wages, their commutes, their options in life, their children's opportunities — and how different things would be in a geonomic society!
H.G. Brown: Significant Paragraphs from Henry George's Progress & Poverty, Chapter 5: The Basic Cause of Poverty (in the unabridged: Book V: The Problem Solved)
H.G. Brown: Significant Paragraphs from Henry George's Progress & Poverty: 11 Effect of Remedy Upon the Sharing of Wealth (in the unabridged P&P: Part IX Effects of the Remedy — Chapter 2: Of the Effect Upon Distribution and Thence Upon Production)
Henry George: Thy Kingdom Come (1889 speech)
If Adam, when he got out of Eden, had sat down and commenced to pray, he might have prayed till this time without getting anything to eat unless he went to work for it. Yet food is God’s bounty. He does not bring meat and vegetables all prepared. What He gives are the opportunities of producing these things — of bringing them forth by labour. His mandate is — it is written in the Holy Word, it is graven on every fact in nature — that by labour we shall bring forth these things. Nature gives to labour and to nothing else.
What God gives are the natural elements that are indispensable to labour. He gives them, not to one, not to some, not to one generation, but to all. They are His gifts, His bounty to the whole human race. And yet in all our civilised countries what do we see? That a few people have appropriated these bounties, claiming them as theirs alone, while the great majority have no legal right to apply their labour to the reservoirs of Nature and draw from the Creator’s bounty.
Thus it happens that all over the civilised world that class that is called peculiarly ‘the labouring class’ is the poor class, and that people who do no labour, who pride themselves on never having done honest labour, and on being descended from fathers and grandfathers who never did a stroke of honest labour in their lives, revel in a superabundance of the things that labour brings forth. ... Read the whole speech
Henry George: The Land Question (1881)
Henry George: The Land Question (1881)
In New York, in San Francisco, in Washington, Boston, Chicago, and St. Louis, live men who own large tracts of land which they seldom or never see. A resident of Rochester is said to own no less than four hundred farms in different States, one of which (I believe in Kentucky) comprises thirty-five thousand acres. Under the plantation system of farming and that of stock-raising on a grand scale, which are developing so rapidly in our new States, very much of the profits go to professional men and capitalists who live in distant cities. Corporations whose stock is held in the East or in Europe own much greater bodies of land, at much greater distances, than do the London corporations possessing landed estates in Ireland. To say nothing of the great land-grant railroad companies, the Standard Oil Company probably owns more acres of Western land than all the London companies put together own of Irish land. And, although landlordism in its grosser forms is only beginning in the United States, there is probably no American, wherever he may live, who cannot in his immediate vicinity see some instance of absentee landlordism. The tendency to concentration born of the new era ushered in by the application of steam shows itself in this way as in many others. To those who can live where they please, the great cities are becoming more and more attractive. ...
What seem to be considered the most radical propositions yet made are those for the creation of a "peasant proprietary" – the State to buy out the landlords and resell to the tenants, for annual payments extending over a term of years, and covering principal and interest. Waiving all practical difficulties, and they are very great, what could thus be accomplished? Nothing real and permanent. For not merely is this, too, but a partial measure, which could not improve the condition of the masses of the people or help those most needing help, but no sooner were the lands thus divided than a process of concentration would infallibly set in which would be all the more rapid from the fact that the new landholders would be heavily mortgaged. The tendency to concentration which has so steadily operated in Great Britain, and is so plainly showing itself in our new States, must operate in Ireland, and would immediately begin to weld together again the little patches of the newly created peasant proprietors. The tendency of the time is against peasant proprietorships; it is in everything to concentration, not to separation. The tendency which has wiped out the small landowners, the boasted yeomanry, of England – which in our new States is uniting the quarter-sections of preemption and homestead settlers into great farms of thousands of acres – is already too strong to be resisted, and is constantly becoming stronger and more penetrating. For it springs from the inventions and improvements and economies which are transforming modern industry – the same influences which are concentrating population in large cities, business into the hands of great houses, and for the blacksmith making his own nails or the weaver working his own loom substitute the factory of the great corporation. ...
But the fatal defect of all these schemes as remedial measures is, that they do not go to the cause of the disease.
What they propose to do, they propose to do for merely one class of the Irish people – the agricultural tenants. Now, the agricultural tenants are not so large nor so poor a class (among them are in fact many large capitalist farmers of the English type) as the agricultural laborers, while besides these there are the laborers of other kinds – the artisans, operatives, and poorer classes of the cities. What extension of tenant-right or conversion of tenant-farmers into partial or absolute proprietors is to benefit them? Even if the number of owners of Irish soil could thus be increased, the soil of Ireland would still be in the hands of a class, though of a somewhat larger class. And the spring of Irish misery would be untouched. Those who had merely their labor would be as badly off as now, if not in some respects worse off. Rent would soon devour wages, and the injustice involved in the present system would be intrenched by the increase in the number who seemingly profit by it. ... read the whole articleHenry George: The Crime of Poverty (1885 speech)
As I say, the man that owns the land is the master of those who must live on it. Here is a modern instance: you who are familiar with the history of the Scottish Church know that in the forties there was a disruption in the church. You who have read Hugh Miller's work on "The Cruise of the Betsey" know something about it; how a great body, led by Dr. Chalmers, came out from the Established Church and said they would set up a Free Church. In the Established Church were a great many of the landowners. Some of them, like the Duke of Buccleugh, owning miles and miles of land on which no common Scotsman had a right to put his foot, save by the Duke of Buccleugh's permission. These landowners refused not only to allow these Free Churchmen to have ground upon which to erect a church, but they would not let them stand on their land and worship God. You who have read "The Cruise of the Betsey" know that it is the story of a clergyman who was obliged to make his home in a boat on that wild sea because he was not allowed to have land enough to live on. In many places the people had to take the sacrament with the tide coming to their knees — many a man lost his life worshipping on the roads in rain and snow. They were not permitted to go on Mr. Landlord's land and worship God, and had to take to the roads. The Duke of Buccleugh stood out for seven years compelling people to worship in the roads, until finally relenting a little, he allowed them to worship God in a gravel pit; whereupon they passed a resolution of thanks to His Grace.Henry George: Thou Shalt Not Steal (1887 speech)
But that is not what I wanted to tell you. The thing that struck me was this significant fact: As soon as the disruption occurred, the Free Church, composed of a great many able men, at once sent a delegation to the landlords to ask permission for Scotsmen to worship God in Scotland and in their own way. This delegation set out for London — they had to go to London, England, to get permission for Scotsmen to worship God in Scotland, and in their own native home!
But that is not the most absurd thing. In one place where they were refused land upon which to stand and worship God, the late landowner had died and his estate was in the hands of the trustees, and the answer of the trustees was, that so far as they were concerned they would exceedingly like to allow them to have a place to put up a church to worship God, but they could not conscientiously do it because they knew that such a course would be very displeasing to the late Mr. Monaltie! Now this dead man had gone to heaven, let us hope; at any rate he had gone away from this world, but lest it might displease him men yet living could not worship God. Is it possible for absurdity to go any further?
You may say that those Scotch people are very absurd people, but they are not a whit more so than we are. I read only a little while ago of some Long Island fishermen who had been paying as rent for the privilege of fishing there, a certain part of the catch. They paid it because they believed that James II, a dead man centuries ago, a man who never put his foot in America, a king who was kicked off the English throne, had said they had to pay it, and they got up a committee, went to the county town and searched the records. They could not find anything in the records to show that James II had ever ordered that they should give any of their fish to anybody, and so they refused to pay any longer. But if they had found that James II had really said they should they would have gone on paying. Can anything be more absurd? ... read the whole speech
Now, here is a desert. Here is a caravan going along over the desert. Here is a gang of robbers. They say: "Look! There is a rich caravan; let us go and rob it, kill the men if necessary, take their goods from them, their camels and horses, and walk off." But one of the robbers says: "Oh, no; that is dangerous; besides, that would be stealing! Let us, instead of doing that, go ahead to where there is a spring, the only spring at which this caravan can get water in this desert. Let us put a wall around it and call it ours, and when they come up we won’t let them have any water until they have given us all the goods they have." That would be more gentlemanly, more polite, and more respectable; but would it not be theft all the same? And is it not theft of the same kind when people go ahead in advance of population and get land they have no use whatever for, and then, as people come into the world and population increases, will not let this increasing population use the land until they pay an exorbitant price?
That is the sort of theft on which our first families are founded. Do that under the false code of morality which exists here today and people will praise your forethought and your enterprise, and will say you have made money because you are a very superior person, and that all can make money if they will only work and be industrious! But is it not as clearly a violation of the command: "Thou shalt not steal," as taking the money out of a person’s pocket?
"Thou shalt not steal." That means, of course, that we ourselves must not steal. But does it not also mean that we must not suffer anybody else to steal if we can help it?
"Thou shalt not steal." Does it not also mean: "Thou shalt not suffer thyself or anybody else to be stolen from?" If it does, then we, all of us, rich and poor alike, are responsible for this social crime that produces poverty. Not merely the people who monopolize the land — they are not to blame above anyone else, but we who permit them to monopolize land are also parties to the theft. ...
What we propose to do is to divide up the rent that comes from land; and that is a very easy thing.
We need not disturb anybody in possession, we need not interfere with anybody’s building or anybody’s improvement. We only need to remit taxes on all improvements, on all forms of wealth, and put the tax on the value of the land, exclusive of the improvements, so that the dog-in-the-manger who is holding a piece of vacant land will have to pay the same amount of tax for it as land of similar value with a building or other improvements upon it. In that way we would treat the whole land of such a community as being the common estate of the whole people of the community.
The people of New York could manage their estate just as well as any corporation, or any private family, for that matter. But for the people of New York to resume their estate and to treat it as their own, it is not necessary for them to go to any bother of management. It is not necessary for them to say to any landowner, this particular piece of land is ours, and no longer yours.
We can leave land titles just as they are. We can leave the owners of the land to call themselves its owners; all we want is the annual value of the land. Not, mark you, that value which the owner has created, that value which has been given to it by improvements; but simply that value which is given to the bare land by the fact that we are all here —that has attached to the land because of the growth of this great community. And, when we take that, then all inducement to monopolize the land will be gone — then these very worthy gentlemen who are holding one-half of the area of this city idle and vacant will find the taxes they have to pay so high that they will have to go to work and build houses or otherwise use the land, or give it away to somebody who will build upon it, or put it to other productive use. And so it will happen all over the country. ...
Go into Pennsylvania, and there you will see great stretches of land, containing enormous deposits of the finest coal, held by corporations and individuals who are working but little part of it. On these great estates the common American citizens who mine the coal are not allowed even to rent a piece of land, let alone buy it. They can only live in company houses; and they are permitted to stay in them only on condition (and they have to sign a paper to that effect) that they can be evicted at any time on five days’ notice. The companies combine and make coal artificially dear here, and make employment artificially scarce in Pennsylvania.
Now, why should not those miners, who work on it half the time, why shouldn’t they dig down in the earth and get up coal for themselves? Who made that coal? There is only one answer — God made that coal. Whom did He make it for? Surely you would say that God made it for the people that would be one day called into being on this earth. But the laws of Pennsylvania, like the laws of New York, say God made it for this corporation and that individual; and thus a few people are permitted to deprive miners of work and make coal artificially dear. ... read the whole article
Henry George: The Wages of Labor
The organisation 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 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? ...
Land being necessary to life and labor, where private property in land has divided society into a landowning class and a landless class, there is no possible invention or improvement, whether it be industrial, social, or moral, which, so long as it does not affect the ownership of land can prevent poverty or relieve the general conditions of mere laborers.
For, whether the effect of any invention or improvement be to increase what labor can produce or to decrease what is required to support the laborer, it can, so soon as it becomes general, result only in increasing the income of the owners of land, without benefiting the mere laborers. ...
The same hopelessness attends the suggestion that working people should be encouraged by the State to obtain a share of the land. It is proposed that, as is being attempted in Ireland, the State shall buy out large land owners in favour of small ones, thus establishing peasant proprietors.
Supposing that this can be done, even to a considerable extent, what will be accomplished save to substitute a larger privileged class for a smaller privileged class? What will be done for the still larger class that must remain the laborers of the agricultural districts, the workmen of the towns, the proletarians of the cities?
Is it not true, as Professor De Laveleye says, that in such countries as Belgium, where peasant proprietary exists, the tenants (for there still exist tenants) are rack-rented with a mercilessness unknown in Ireland? Is it not true that in such countries as Belgium the condition of the mere laborer is worse than it is in Great Britain, where large ownerships obtain? And if the State attempts to buy up land for peasant proprietors, will not the effect be, what is seen today in Ireland, to increase the market value of land and thus make it more difficult far those. not so favoured, and for those who will came after, to get land? ...
Aside from all this, any scheme of dividing up land while maintaining private property in land is futile. Small holdings cannot co-exist with the treatment of land as private property where civilisation is materially advancing and wealth augments.
We may see this in the economic tendencies that in ancient times were the main cause that transformed world conquering Italy from a land of small farms to a land of great estates. We may see it in the fact, that, while two centuries ago the majority of English farmers were owners of the land they tilled, tenancy has, been for a long time the all but universal condition of the English farmer. And now the mighty forces of steam and electricity have come to urge concentration. It is in the United States that we may see on the largest scale how their power is operating to turn a nation of landowners into a nation of tenants.
The principle is clear and irresistible. Material progress makes land more valuable, and when this increasing value is left to private owners land must pass from the ownership of the poor into the ownership of the rich, just as diamonds so pass when poor men find them.
There is one way, and only one way, in which working people in our civilisation may be secured a share in the land of their country, and that is the way that we propose – the taking of the profits of land ownership for the community! ... read the whole article
Louis Post: Outlines of Louis F. Post's Lectures, with Illustrative Notes and Charts (1894) — Appendix: FAQ
Joseph Stiglitz: October, 2002, interview
William Ogilvie: An Essay on the Right of Property in Land (Scotland, 1782)
... How preposterous, then, is the system of that country which maintains a civil and military establishment, by taxes of large amount, without the assistance of any land-tax at all! - In that example may be perceived the true spirit of legislation as exercised by landholders alone. ...Henry George: The Great Debate: Single Tax vs Social Democracy (1889)
The actual state of Europe, with respect to property in land, is very different from what might be desired. That exclusive right to the improvable value of the soil which a few men, never in any country exceeding one hundredth part of the community, are permitted to engross, is a most oppressive privilege: by its operation, the happiness of mankind has been for ages more invaded and restrained, than by all the tyranny of kings, the imposture of priests, and the chicane of lawyers taken together, though these are supposed to be the greatest evils that afflict the societies of human kind. ...
The monopoly possessed by land-holders enables them to deprive the peasants not only of the due reward of industry exercised on the soil, but also of that which they may have opportunity of exercising in any other way, and on any other subject; and hence arises the most obvious interest of the landholder, in promoting manufactures. ...
Property in Land, as at present established, is a monopoly of the most pernicious kind. The interest of landholders is substituted for that of the community; it ought to be the same, but it is not. The landholders of a nation levy the most oppressive of all taxes; they receive the most unmerited of all pensions: if tithes are oppressive to industry, rents capable of being raised from time to time are much more so.
Regarding the whole wealth of the community, as belonging of right to themselves, landholders stand foremost in opposing the imposition of exorbitant taxes by the State, forgetting the exorbitancy of that taxation which they themselves impose on the cultivators of the soil, and which the sovereign may in justice, and in the way of retaliation ought to, regulate and restrain. They clamour aloud against pensions and sinecure places, bestowed by the sovereign, not adverting that their own large incomes are indeed pensions, and salaries of sinecure offices, which they derive from the partiality of municipal law in favour of that order of men by whom its regulations are virtually enacted.... Read the entire essay
The importance that we attribute to this taking of rent is that it is not merely taking that much from a source that will not restrict industry, will not oppress labour, will not hamper production; but it will make mere landownership utterly valueless. (Applause.) By taking the rent
Tax land values up to the full and what would you have? The land that has no value, that is to say, the land that two men do not want to use could be had by labour not merely without price, but without tax. The selling value of land would be destroyed, and all that the user of land need pay would be a price amounting to the special advantage that he had above his fellows by the possession and use of a particular piece of land. ... Read the entire article
"A. J. O." (probably Mark Twain) Slavery
Suppose I am the owner of an estate and 100 slaves, all the land about being held in the same way by people of the same class as myself. It is a profitable business, but there are many expenses and annoyances attached to it. I must keep up my supply of slaves either by buying or breeding them. I must pay an overseer to keep them continually to their work with a lash. I must keep them in a state of brutish ignorance (to the detriment of their efficiency), for fear they should learn their rights and their power, and become dangerous. I must tend them in sickness and when past work. And the slaves have all the vices and defects that slavery engenders; they have no self-respect or moral sense; they lie, they steal, they are lazy, shirking work whenever they dare; they do not care what mischief their carelessness occasions me so long as it is not found out; their labor is obtained by force, and given grudgingly; they have no heart in it. All these things worry me.
Land is traditionally subject to a host of legal and customary limits on use and ownership. Covenants are found in land titles: seldom in titles to cars or canned goods. Divided ownership is common, there is so much about land to be owned. There are easements through, air rights over, mineral rights under, and neighbors and zoning all around any parcel of land. Changing lot lines is unavoidably a social process, there is no other way.
A large share of the more valuable land in cities is held by estates. Public and eleemosynary [non-profit] holders are preferentially tax exempt and often without any visible motive to economize. Water licenses are held subject to "use it or lose it" traditions leading to appalling waste. Broadcasting/telecasting licenses are highly political. And so on. Only a resource with the characteristics of land could be subject to such a wide range of non-economic pressures.
Land is a major basis of market power
We have seen that landownership conveys superior bargaining power (A-?), accretes around existing nuclei (B-9,a), and is highly concentrated (B-9,b). We have seen markets are sticky. It follows that landownership is a natural basis of market power.
Amassing land is always done, can only be done, by shrinking the holdings of others. To expand is to preempt. If A is to have more then B, C, D et al. must have less, there is no other way. A can amass more capital by saving, creating new capital, leaving B, C, D et al. with as much as before. A can increase his labor income by working longer, or harder, or smarter, producing more, leaving others with as much as before. He and she together can also spawn more children: labor, like capital, is reproducible, and indefinitely augmentable. Possessing land, however, means just one thing: bumping others.
In the region of the mind, the thing possessed may be shared by all with no diminution to anyone. No one's pleasure In Shakespeare, or Beethoven, or understanding physics is any less because at the same time millions of others have the same pleasure. Art, letters and science are the common property of mankind, open to all who care to acquire them. The creative producer's pleasure is in proportion to the number with whom he shares. The gratification is from sharing, not excluding. The contrast with landholding is nearly total.35
Mason Gaffney: The Property Tax is a Progressive Tax
Amassing claims on wealth by creating and producing is not, therefore, a threat to others. Amassing capital through saving does not weaken or impoverish others. Producing goods does not interfere with others' doing the same. One producer may drive another from a particular limited market, but glutting one market increases real demand for the products of other markets, and raises the real value of others' incomes by lowering prices. Amassing land, however, has to deprive others, both relatively and absolutely. Concentrated holding and control of land, therefore, have always been threats to the well-being of those left out.
Conversely, the only way the landless, e.g. in South Africa, can get land is from those who now have it. "Growth" is often advanced as the solution to maldistribution, injustice and poverty, but that is mere temporizing because land does not grow. When production and demand grow, land rents rise. Of land it is starkly true, "the problem is not production, but distribution". There is no production; only distribution. Read the whole article
Studies of foreign-owned farms in America have shown them to be larger than owner-occupied holdings. The 1900 Census of Agriculture (a high water mark in good government statistics) reported on farm landlords.
Vanishing Farmers and Unaffordable Farms
You might say this would be a blessing for the farmers who were now more free of these property taxes.
However, it didn't work out that way. The mean acres per farm (the average, that is) had remained fairly constant for 65 years (1870-1935) at about 155 acres, despite two major industrial merger movements, including the steel industry. After 1935 the mean value took off and had tripled to 462 acres by 1987. As the number of farms were falling, national population was on the rise. In 1900 there was one farm per 11 Americans; in 1987 there was one farm per 113 persons.
Farms became unaffordable for folks starting at the bottom of the agricultural ladder.
Real wage rates, meanwhile since 1955, have not risen as fast as real land prices, and they haven't risen at all since 1975. This has raised the labor-price of land (the number of days/years a person must work at the average wage rate in order to raise the price of a farm.) Coupling this with rising acres per farm, the labor-price of a farm roughly tripled, from about 6 years' wages (before payroll deductions) in 1954 to about 17 years' wages in 1987. That, of course, doesn't mean you could buy a farm in 17 years, unless you didn't eat anything and saved every penny of your wages to buy a farm.
That is the mean size. At the same time, concentration of ownership was rising. That was the subject Henry George and Francis Walker debated way back in the 1880s. In the process Henry George invented something, later to be known as the "Lorenz Curve" - academicians are not generous about crediting Henry George with his various contributions to the discipline of political economy. Basically this Lorenz Curve is a way of measuring concentration by answering the question, what fraction of all the land is owned by the top ten percent. The curve extends from zero up to 100 percent. This curve has been reduced to a single figure, called the Gini Ratio, which is a measure of concentration which varies between zero and one. At zero, everyone has the same amount; at one, one person has it all.
In 1900 the Census Bureau began publishing farm data ranked by acres per farm. Using those data, the Gini Ratio was .58 in 1900. By 1930 the GR had gotten up only to .63. This, remember, was the peak year of property taxes, before the property tax started waning. The GR began to rise faster, and by 1950 it was up to .70. It plateaued there for 15 years and then rose again to .76 by 1987. That is a high degree of concentration. (By comparison, GRs for personal income are much lower, about .40, and are much more stable over decades.) The accelerated rise since 1930 coincided with the rise of mean acres per farm, and both followed the fall of property tax rates.
The Gini Ratio has been criticized because it deals only with the concentration among existing farms, and doesn't take into account all of the former farmers who left the business. To adjust for this, we can simply add them to the distribution of the farms as farmers with zero land. There are 4-1/2 million farms that died between 1935 and 1988. If you add in the farmers with zero acres of land to the lowest bracket, that raises GR for 1988 from .76 to .92, a radical rise of inequality since 1930 (.63). But calculating the ratio this way gives you a better sense of how concentration has shot up during and since the Great Depression. In the Great Depression (1930-1941), six million farms provided a refuge for the urban jobless and homeless. Today, that refuge is closed.
The Rise of Land Quality in Vast Farms
A frequent way to trivialize this information on concentration is to say "farms in the Census are ranked by acreage and so the degree of concentration is a statistical illusion." And "it looks like concentration because you are mixing million acre ranches in New Mexico with family farms in Iowa or New England, which are worth much more per acre, and if you adjust for that it is not as concentrated." That is a common allegation.
There are two things wrong with that allegation, that make it pure humbug.
The first is, when you rank farms by acres per farm, as the Census does, the quality of land in the top bracket has been going up very sharply over this period.
One example has to do with irrigation. About 60 to 80 years ago, 1890-1930, irrigation was the refuge of the small farmer -- it was the new frontier, and specifically in California. A lot of publicity has been given to something called the Irrigation District movement, whereby farms and cattle ranches were incorporated into taxing districts or irrigation districts, which taxed land and exempted improvements and used tax powers to issue bonds and build expensive irrigation units. And under this system, people in the district paid for water whether they used it or not, and caused a revolution in California agriculture from 1900 to about 1930. It was a fantastic case study in economic development (which has been mostly ignored by academic and government economists). As a result, the average size of a farm in California went way down. And the concentration of land went way down, and irrigation was at the forefront of this.
When irrigation was young in Anglo-America (1890-1914), it was the recourse of small farmers and ranchers. Then, vast spreads were subdivided to create small irrigated farms. There was drastic subdivision and intensification (1900-1930). After the 1930s drop in property tax rates, this land has been reconsolidated. If you don't tax land, conglomeration occurs inexorably. The sections buy out the quarters. This has happened in irrigated agriculture faster than almost anywhere else. Ownership and control based on water have become highly concentrated. Irrigated land is worth a lot more than dry land.
Land in farms of 1,000 acres and over actually dropped (nationally) by 15 percent from 1900 to 1910, the only drop on record. Now, however, 34 percent of all irrigated land is in the top bracket, farms of 2,000 acres and over. Control of irrigated land means control over water. Control of water gives control over arid lands roundabout. Ownership and control based on water have become highly concentrated. For farms with irrigated land, the Gini Ratio is .82, substantially higher than the GR of .76 for all farms.
From 1930-87, the fraction of all farm acres in units of 1,000 acres and over rose from 28% of the total to 62% of the total. That is a rise of 123% over the 1930 base. That rise in degree of concentration is impressive, all by itself. At the same time, however, the mean value per acre in the largest spreads was rising much faster than that of other farms. In result, the value of the real estate (land and buildings) in these giant spreads rose from 8% of the total in 1930 to 38% of the total in 1987. That is a rise of 375% over the 1930 base.
The second thing that makes the trivialization humbug is a statistical principle called "regression fallacy." Many people, otherwise bright, are thicker than mud when it comes to picking up on this principle, so there must be some mental block built into the culture. Once you see this "cat," however, it's pretty simple and straightforward. It says that the degree of concentration you find in any distribution depends on what you choose as the ranking variable. If you want to compare the concentration of value with the concentration of acreage, you can't rank the farms by acreage and then take the top bracket and ask what the value is. You have got to re-rank them by value, and these are entirely different rankings with an entirely different collection of farms in the top bracket, and
naturally these are more valuable farms.
This reranking, farm by farm, is almost impossible to do from published census data, which come in large groups. But I managed to do it with some other series, and I can vouch for the fact that if you do rewrite the data by value, you get a higher - not a lower - degree of concentration in terms of value than in terms of acreage.
So, for those two reasons, concentration of land ownership is not only high but it has risen at a very rapid rate.
To sum up,
Conclusion: to redemocratize farming, promote small farms and break up big ones, raise land tax rates. Read the whole article
Mason Gaffney: Who Owns Southern California?
Walter Rybeck and Ronald Pasquariello: Combating Modern-day Feudalism: Land as God’s Gift
Calling for "a modern equivalent of Jubilee," signers of a proposal fundamentally to revise the property tax structure petitioned the endorsement of the 1984 General Conference of the United Methodist Church. The proposal, which the conference did endorse, sought to shift taxes from labor to land values. Combining good biblical theology with public policy insight, the plan offers a simple but critical tax change as a way of dealing with "poverty, joblessness, slums, urban decay, farmland destruction, the erosion of public services and facilities and social justice."
The current property tax combines land and building taxes; recently, it has become a tax mostly on buildings. As a result, owner-made building improvements are overtaxed, while land is under-taxed. And undertaxing land encourages its disuse. The Methodist petitioners’ simple proposal was to tax land, not buildings. The possibilities are great for achieving social justice through this easily implemented change in the property tax. ...
Biblical justice in this instance, as Walter Brueggemann asserts, "is to sort out what belongs to whom, and return it to them." ...
The generally held belief that ours is a nation of small landholders is a myth. According to Gene Wunderlich, quoted in a 1979 Harper’s article, "about 3 percent of the population owns 55 percent of all American land." And that same 3 per cent holds "95 percent of the private land." Furthermore, while 64 per cent of families own or are in the process of buying their residences, the residential sector occupies only 2 per cent of the 1.3 billion acres of privately held land.
Feudalism, it seems, is still with us; its new face is the landlordism that lets a few benefit from what belongs to society. This lopsided arrangement denies the Bible’s insistence that an equitable share of the Lord’s resources is the birthright of all humans. While the U.S. is infinitely better off than the countries of Latin America, Asia and Africa, our situation is worsening. Consider these facts:
• Poor people pay inordinate rents. While in 1970, 25 per cent of income generally went for rent, today, according to National Low-Income Housing Coalition reports, that percentage for many renters, especially the poor, has doubled.
Early in the century, poor immigrants in New York City could buy or lease a shop with a fair chance of prospering. Now many minorities face site costs that almost doom new businesses from the start. A front foot costs more than the whole lot would have 70 years ago, a startling change even when considering inflation.
•Large firms are deserting the cities for cheaper suburban sites, taking with them employment and badly needed tax revenues.
•Large agribusinesses represent only 13 per cent of U.S. farms but take in 72 per cent of agricultural sales, according to the U.S. Department of Agriculture’s Economic Research Service. At the other end of the scale, 50 per cent of the farms account for only 3 per cent of sales.
• Land-holding is gaining ascendancy over land-using. Land speculation -- holding land for its future worth rather than putting it into current production -- has become standard practice for the affluent.
What gives value to land. Any real estate textbook will explain that the three factors for determining land value are "location, location and location." And any property owner will affirm this truth. But what generates locational value? Three phenomena: God, people and public activities.
Private vs. common property. ... "The earth is the Lord’s and the fullness thereof" (Ps. 24:1). ...
This idea of the land belonging to all humanity, to the community as a whole, is not entirely inoperative today. National parks, school grounds, public building sites, many wilderness areas, lakes and ocean fronts are recognized as the common property of all.
The immorality of landlordism. An increasingly small elite is taking possession of the nation’s land, enabling them to squeeze more and more from the landless. This is runaway landlordism, and current public policy fuels its progress.
On the federal level, while the wages of ordinary workers find no shelter from the Internal Revenue Service, exemptions and special preferences for landowners whittle down their taxes or turn real estate losses into profits. The 1986 Tax Reform Act aims to reduce these privileges, but landowners’ past ingenuity in avoiding taxation warrants continued vigilance over tax structures. At the local level, the property tax rises for owners who build or improve their homes, rental apartments or commercial buildings, while it is reduced for those who let their land go fallow. Compare the following situation of the Joneses, the Smiths and the Greens.
Overtaxing good land use while under-taxing blight and empty lots invites slumlords and encourages land speculators. This type of landlordism -- or modern feudalism -- is an injustice. It allows individual landowners to siphon off the lion’s share of land values.
The ethical foundations of land value taxation. The biblical Jubilee prescription -- redividing the land every half century -- may have been feasible for a people practicing crude agriculture. However, a modern civilization cannot reshuffle the land without confiscating unmovable property or discouraging economic progress. The land value plan suggested here -- increasing land taxes, while decreasing taxes on labor, production and buildings -- achieves the same Jubilee goal without negative effects. It lets everyone share the economic value of the land rather than the land itself, just as a corporation, instead of carving up physical portions of itself each year, lets shareholders enjoy portions of the profit. ...
Poverty, joblessness and homelessness have been central concerns of religious social-action groups. There is a growing awareness that neither private nor public charity is sufficient in dealing with these problems. Shifting property taxes offers an effective way to encourage public policy to be responsive to blighted cities, farm dislocation, declining industries, chronic unemployment and growing poverty. The need to infuse biblical principles into solutions for these problems seems imperative. Acknowledgment of this necessity is already evident in the Catholic bishops’ pastoral letter on the economy and parallel works by the Presbyterians, United Methodists and the United Church of Christ. The need to address poverty’s basic causes, including the unhealthy concentration of America’s land and resources in the hands of so few owners -- who have tended to misappropriate land values -- ought to be high on our religious and public policy agendas. Read the whole articleKarl Williams: Landlording It Over Us
Geoism holds that there’s nothing necessarily wrong with being rich – indeed, an economic system exists whereby we could ALL be rich (in wealth, education or leisure time). The justification for riches all depends on whether a wealthy person has become so through creating wealth (in the form of goods and services that people willingly buy in a free and fair market) or through living off the wealth really created by others. Earned wealth might arise through talented or arduous inventing, writing, sports ability, entertaining, entrepreneurialship or whatever. Such examples of fairly earned wealth should not be subject to any (confiscatory) taxation, which would be legalised robbery. ...
Geoism seeks to expose the many forms of unearned wealth, or privilege, that exist in our monstrous economic system. Monopoly rights are the more obvious examples of economic privilege, but less noticeable is the massive wealth to be gained by using the Global Commons (especially land) without reimbursing the rest of us. ...
Here we’re going to look at one of the most obvious examples of unearned wealth – the massive riches accumulated by the great landowners of Britain. Remember, it’s not the acreage of land that is important, but the value of the land. ...
But the rewards of land go far beyond status, evidenced by how, over the centuries, the land-owning elite has pulled the levers of power in society, politics and the world of commerce. The Earl of Derby’s 1881 candid analysis of the benefits of owning land perhaps says it best,
Britains' wealthiest man gets rich the easy way -- he has his underlings collect and bank his rent. And if the rents from his vast land holdings weren’t enough, soaring property prices have escalated his net worth sky high – to be exact, UK£11.5 billion. To give him his full title, he is His Grace, Gerald Grosvenor, OBE, Sixth Duke of Westminster.Mason Gaffney: Land as a Distinctive Factor of Production
Forget the vast tracts of rural land, including a 100,000-acre estate in Scotland which contains no less than three mountains. The 300 acres the duke owns in central London, comprising Mayfair and Belgravia, are today one of the most valuable patches of ground on the planet. ...
The duke has nowadays diversified his land portfolio. His commercial property company, Grosvenor, has become a serious player, with a vast array of investments and developments around the world. These include office blocks in San Francisco, business parks in Vancouver, luxury apartments in Hong Kong and shopping centres in Spain and Portugal. In the UK, Grosvenor has developed Festival Place shopping centre in Basingstoke and is set to undertake a £700m. mixed-use redevelopment in the centre of Liverpool. Back in his tract of Mayfair, land values are in the stratosphere: in 2001, BP’s pension fund sold ten acres of Mayfair for a cool £335m.
Is it any wonder that, given how there is little or no land value taxation, the duke has all his many eggs in the land investment basket? But it’s not just for economic considerations that he could never contemplate selling his vast acreage, for he has a philosophical reason for not selling. (Have a bucket ready before reading the following!) “This is part of my heritage, my birthright. It is not to do with anything materialistic, but is deeply ingrained.” Read the whole article
The initial distribution of land - the origin of property in land - is military, legal, and political, not economic. The prime business of nations throughout history has been to gain and defend land. What was won by force has no higher sanction than lex fortioris, and must be kept and defended by force.
After land is appropriated by a nation the original distribution is political. The nature of societies, cultures and economies for centuries afterwards are moulded by that initial distribution, exemplified by the differences between Costa Rica (equal partition) and El Salvador with its fabled "Fourteen Families" (Las Catorce), or between Canada and Argentina.
Political redistribution also occurs within nations, as with the English enclosures and Scottish "clearances", when one part of the population in effect conquered the rest by political machinations, and took over their land, their source of livelihood. Reappropriation and new appropriation of tenures is not just an ancient or a sometime thing but an on-going process. This very day, proprietary claims to water sources, pollution rights, access to rights of way, radio spectrum, signal relay sites, landing rights, beach access, oil and gas, space on telephone and power poles(e.g. for cable TV), taxi licences, etc. are being created under our noses. In developing countries of unstable government the current strong man often grants concessions to imperialistic adventurers who can bolster his hold on power by supplying both cash up front, and help from various US and UN agencies from the IMF to the United States Marine Corps.
Ordinary economic thinking today would have it that a nation that distributes land among private parties by "selling to the highest bidder" is using an economic method of distribution. Such thinking guides World Bank and IMF economists as they advise nations emerging from communism on how to privatise land. The neutrality is specious, at best. Even selling to the highest bidder is a political decision, as 19th century American history makes clear.
The right to sell was won by force, is not universally honoured, and must be kept by continuous use of force. In practice, selling for cash up front reserves most land for a few with front-money advantage, inside information, good contacts, corrupt aids, etc. The history of disposal of US public domain leaves no doubt about this and it is still going on with air rights, water, radio, landing rights, fishing licenses, etc. Choices being made currently are just as tainted as those of 19th century history.
Selling land in large blocks under frontier conditions is to sell at a time before it begins yielding much if any rent. It is bid in by those few who have large discretionary funds of patient money. Politicians, meantime, treat the proceeds as current revenues used to hold down other taxes today, leaving the nation with inadequate revenues in the future.
The ability to bid high does not necessarily come from legitimate savings. The early wealth of Liverpool came from the slave trade. High bidders for many properties today are middle eastern potentates who neither produced nor saved the wealth they control. Other high bidders are criminals, who find the "sanctity of property" a splendid route for laundering their gains, and a permanent shelter against further prosecution. Read the whole article
Henry George: In Liverpool: The Financial Reform Meeting at the Liverpool Rotunda (1889)
a synopsis of Robert V. Andelson and James M. Dawsey: From Wasteland to Promised land: Liberation Theology for a Post-Marxist World
In How the Other Half Dies, Susan George wrote that "The most pressing cause of the abject poverty which millions of people in this world endure is that a mere 2.5% of landowners with more than 100 hectares control nearly three quarters of all the land in the world - with the top 0.23% controlling half." To recognize this social plague for what it is, and to avert a backlash of despair, requires a clear understanding of two great themes: the Promised Land and the Wasteland. ...
To recognize that "the earth is the Lord's" is to see that the same God who established communities has also in his providence ordained for them, through the land itself, a just source of revenue. Yet, in the Wasteland in which we live, this revenue goes mainly into the pockets of monopolists, while communities meet their needs by extorting individuals the fruits of their honest toil. If ever there were any doubt that structural sin exists, our present system of taxation is the proof. Everywhere we see governments penalizing individuals for their industry and creativity, while the socially produced value of land is reaped by speculators in exact proportion to the land which they withhold. The greater the Wasteland, the greater the reward. Does this comport with any divine plan, or notion of justice and human rights? Or does it not, rather, perpetuate the Wasteland and prevent the realization of the Promised Land?
This not meant to suggest that land monopolists and speculators have a corner on acquisitiveness or the "profit motive," which is a well-nigh universal fact of human nature. As a group, they are no more sinful than are people at large, except to the degree that they knowingly obstruct reforms aimed at removing the basis of exploitation. Many abide by the dictum: "If one has to live under a corrupt system, it is better to be a beneficiary than a victim of it."
But they do not have to live under a corrupt system; no one does. The profit motive can be channeled in ways that are socially desirable as well as in ways that are socially destructive. Let us give testimony to our faith that the earth is the Lord's by building a social order in which there are no victims. Read the whole synopsis
Dan Sullivan: Are you a Real Libertarian, or a ROYAL Libertarian?
When the state granted land titles to a fraction of the population, it gave that fraction devices with which to levy, and pocket, tolls on the fruits of the labor of others. Those without land privileges must either buy or rent those privileges from the people who received the grants or from their assignees. Thus the state titles enable large landowners to collect a transfer payment, or "free lunch" from the actual land users. ...
A favorite excuse of royal libertarians is that the land has been divided up for so long that tracing the rightful owners would be pointless. But there can be no rightful owners if we all have an inalienable right of access to the earth. It is not some ancient injustice we seek to rectify, but an ongoing injustice. The piece of paper granting title might be ancient, but the tribute levied on the landless goes on and on.
One might as well have accepted monarchy under the excuse that whatever conquest led to monarchy occurred centuries ago, and that tracing the rightful monarchs would be pointless. Indeed, landed aristocracy is the last remnant of monarchy. ... Read the whole piece
Bill Batt: How Our Towns Got That Way (1996 speech)
Two-factor economics, however, had advantages to influential individuals and special interests. Land speculators who were positioned to profit from knowing where locational values would increase, or were in a position to cause those increases, could quickly and easily reap a private gain. Simply by holding title to parcels of real property, without doing anything at all to increase their value, one could quickly turn a profit. This is because the increment of unearned increases resulting from social investments were left for owners to reap rather than recovered by society. In three-factor economics, land rent reverted to society in an automatic and efficient manner. When a railroad magnate like George Leland Stanford extended the Southern Pacific track to the east of Los Angeles on land that he was granted by the government, all he then needed to do was to sit back and wait for the land sales to give him a return on that which was made more valuable by his investment in the line. All across America, land speculators learned that capturing monopoly titles to tracts of land allowed them to quickly and easily turn a "profit" on their investment yet hardly raising a finger.... read the whole article
As with all nineteenth century moral philosophers, Henry George subscribed to a belief in natural law. The natural order of things as he saw it required that land be held in usufruct and that rent from such should be returned to society. The theory was inspired by his deeply religious roots and grounded in his reading of the prominent thinkers that predated him. The natural order was also a moral order, and the failure to comply with the order of nature and society as he saw it was a perversion of justice. The fruits of the land belonged to everyone, just as the fruits of one’s own labor were uniquely one’s own. Since one owned one’s body, one was entitled to keep the product of one’s physical efforts. Society had no more right to confiscate the earnings of one’s sweat and brow than it ought to leave in the hands of rich landowners the rent that was everyone’s inherent birthright to be shared. There were just and unjust taxes, and the only just tax was that which grew out of rent, of the unearned increment that visited certain land sites as windfall gains because of the efforts and investments by the community. Income and excise taxes were unjust and confiscatory— even theft, as especially were tariffs. Taxing or collecting land rent alone was the means of ending poverty and restoring progress. Indeed many Georgists reject use of the word tax entirely, preferring instead to talk instead about rent collection. There is even a lapel button Georgists use that says “Abolish all taxes; collect ground rent instead.” ...
Economic justice was and is the primary concern of Georgist economics, but not the only one. Land ownership is far more concentrated than other forms of income or of wealth;36 as a rough rule of thumb, approximately one third of the households in the United States own no land at all. Because a tax on land cannot be passed forward, these households therefore pay no taxes at all.37 The taxes come instead roughly equally from residential and non-residential parcel owners alike. Farmers and foresters, who typically own land of very low market value on account of its remote location, pay a negligible amount of taxes. This means, of course that most of the non-residential tax burden falls upon commercial parcels, but the burden on tenants represents no change from the going rate of floor space whatsoever. George himself had given considerable attention to the virtues of land taxation. Measured against the current principles of sound tax theory typically enumerated by schools of economics and public administration, contemporary advocates give the tax high marks. It is no accident, for example that a total of eight Nobel-Prize-winning economists have endorsed the principles of land taxation.38 The criteria typically used by experts in tax policy besides equity are variously defined to include neutrality, efficiency, simplicity, administrability, and stability. Because taxation inevitably has a moral dimension, the way in which taxes are designed and administered is also therefore profoundly moral in its content.
36For example, 95% of the USA is owned by the richest 3% of Americans; 60% of El Salvador is owned by the richest 2% of El Salvadorans; 86% of South Africa is owned by the white minority; 74% of United Kingdom is owned by the richest 2% of Britons; and 84% of Scotland is owned by the richest 7% of Scots. This probably understates the concentration, because it measures ownership not by land value but by land area. See http://www.geocities.com/RainForest/3046/. Also Frank Ackerman, The Political Economy of Inequality, Washington: Island Press, 2000, and http://www.islandpress.org/ecocompass/changingnatow/inequality.html.
37For a further explication of the economic dimensions of collecting land rent, see the author’s “The Merit of Site Value Taxation,” presented at a symposium of the Global Institute for Taxation of St. John’s University, Staten Island at The World Trade Center on October 1-2, 1999.
38 Eight Nobel Prize-winning Economists have Endorsed Land Value Taxation:
Milton Friedman: “I share your view that taxes would be best placed on the land, and not on improvements,” and “In my opinion, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago.”
Herbert Simon: “Assuming that a tax increase is necessary, it is clearly preferable to impose the additional cost on land by increasing the land tax, rather than to increase the wage tax— the two alternatives open to the City (of Pittsburgh). It is the use and occupancy of property that creates the need for the municipal services that appear as the largest item in the budget— fire and police protection, waste removal, and public works. The average increase in tax bills of city residents will be about twice as great with wage tax increase than with a land tax increase.”
Paul Samuelson: “Pure land rent is in the nature of a ‘surplus’ which can be taxed heavily without distorting production incentives or efficiency.” A land value tax can be called “the useful tax on measured land surplus.”
James Tobin: “I think in principle it’s a good idea to tax unimproved land, and particularly capital gains (windfalls) on it. Theory says we should try to tax items with zero or low elasticity, and those include sites.”
James Buchanan: “The landowner who withdraws land from productive use to a purely private use should be required to pay higher, not lower, taxes.”
Franco Modigliani: “It is important that the rent of land be retained as a source of government revenue. Some persons who could make excellent use of land would be unable to raise money for the purchase price. Collecting rent annually provides access to land for persons with limited access to credit.”
Robert Solow: “Users of land should not be allowed to acquire rights of indefinite duration for single payments. For efficiency, for adequate revenue and for justice, every user of land should be required to make an annual payment to the local government equal to the current rental value of the land that he or she prevents others from using.
William Vickrey: “It (land value taxation) guarantees that no one dispossess fellow citizens by obtaining a disproportionate share of what nature provides for humanity.”
The endorsements from the last four economists named above were taken from a letter dated November 7, 1990 to Mikhail Gorbachev signed by 30 prominent U.S. economists. That letter is reprinted in Richard Noyes (ed.), Now the Synthesis: Capitalism, Socialism, & the New Social Contract. London: Shepheard-Walwyn, 1991, pp. 225-230.
The second Friedman quotation is from Human Events, November 18, 1978, p. 14; quoted also in the Fortune Encyclopedia of Economics, New York: Warner Books, 1993.
... In the Georgist view, this economic rent is the public’s birthright, and the failure to collect it and to use it to pay for the general costs of government services is a moral as well as a public policy lapse. Georgists regard the private confiscation of public wealth as mistaken policy if not actually an immoral transgression — in a word, theft! He himself was an advocate of the public owning and protecting “the commons” and what is today often called “natural capital.” Studies have shown that if economic rent were collected in full as well as other appropriate revenues such as user fees and green taxes, the total income would likely be enough to pay not only the costs of all government services but provide a citizens’ dividend of significant amounts as well.48 Statistical data is difficult to compile, but what studies have been attempted to date indicate that economic rent in all its forms and from all its sources comprises approximately a third of the economy as it is currently calculated.49 Arrangements such as these are to the followers of Henry George a far more efficient and moral system of public finance. ... read the whole article
Bill Batt: How the Railroads Got Us On the Wrong Economic Track
The Costs of Poor Taxes
Society pays a price for not adopting taxes which follow the principles developed over the centuries. Here I want only to show how the resulting distortions that arose in the use of land ultimately caused the railroads to fail in being able to serve society. While in the short term the railroads certainly saved themselves from having to pay taxes on their vast land holdings the most valuable of which were right around their own investment in tracks and stations they ultimately lost the frequency of traffic which that tax structure would have induced. This is because the population and improvement densities needed to make public transit traffic economically viable did not come about. ... read the whole article
Robert G. Ingersoll: A Lay Sermon (1886)
No man should be allowed to own any land that he does not use. Everybody knows that -- I do not care whether he has thousands or millions. I have owned a great deal of land, but I know just as well as I know I am living that I should not be allowed to have it unless I use it. And why? Don't you know that if people could bottle the air, they would? Don't you know that there would be an American Air-bottling Association? And don't you know that they would allow thousands and millions to die for want of breath, if they could not pay for air? I am not blaming anybody. I am just telling how it is. Now, the land belongs to the children of Nature. Nature invites into this world every babe that is born. And what would you think of me, for instance, tonight, if I had invited you here -- nobody had charged you anything, but you had been invited -- and when you got here you had found one man pretending to occupy a hundred seats, another fifty, and another seventy-five, and thereupon you were compelled to stand up -- what would you think of the invitation? It seems to me that every child of Nature is entitled to his share of the land, and that he should not be compelled to beg the privilege to work the soil, of a babe that happened to be born before him. And why do I say this? Because it is not to our interest to have a few landlords and millions of tenants.
The tenement house is the enemy of modesty, the enemy of virtue, the enemy of patriotism. Home is where the virtues grow. I would like to see the law so that every home, to a small amount, should be free not only from sale for debts, but should be absolutely free from taxation, so that every man could have a home. Then we will have a nation of patriots.
Now, suppose that every man were to have all the land he is able to buy. The Vanderbilts could buy today all the land that is in farms in the State of Ohio -- every foot of it. Would it be for the best interest of that State to have a few landlords and four or five millions of serfs? ... Understand, I am not blaming these people. There is a good deal of human nature in us all. You remember the story of the man who made a speech at a Socialist meeting, and closed it by saying, "Thank God, I am no monopolist," but as he sank to his seat said, "But I wish to the Lord I was!" We must remember that these rich men are naturally produced. Do not blame them. Blame the system! ... read the whole article
In 1955, Spiro Agnew was a Maryland State Assemblyman on the rise. He carried a new law that let tax assessors value farmland on its "use-value" as farmland, instead of market value. It let owners who were farming for unearned increments around Baltimore and D.C. hold out with low carrying costs. "Farmland" meant land used for farming, and any play at farming would qualify. Under this law, a relative of mine with 102 acres in Maryland near Western Avenue, the D.C. line, kept just two steers thereon to validate his farmland assessment status. Holding for the rise "never crossed his mind." Right -- except, whenever such land is condemned for public use, courts everywhere have held that compensation must be based on speculative market value. ...
It is not just peri-urban land speculators who gain. A large chunk of land value in rural regions is not based on cash flow from food and fiber, but on amenities. Wisconsin is a major playground for rich urbanites from nearby Chicago, Milwaukee, Minneapolis and St. Paul. "Use-value" assessment exempts this chunk of value completely, for use-value is based on capitalizing the net cash farm income from growing crops, and, in the Wisconsin law, specifically corn. The highest land values per capita in the State are in Vilas County up in the north woods, once dismissed as worthless "cutovers." Vilas' barren podzol soils are worthless for corn, but sparkling lakes bedizen the County. Values per capita in Vilas are 6 times those in Milwaukee. Rich recreationists and "investors" (read speculators) are gobbling up the "wild forties." Shoreline parcels are like diamonds among coal. ...
100 years ago, American Georgists made a big point that city land outvalues rural land many times over. One implication is that taxing city land is taxing the rich, and we can ignore farmland. Some land-taxers counsel that farmers are easily misled to oppose us, so leave them alone and convert the cities. But rich city folks also own choice rural lands.
those are a few of the struggling family farmers whom use-value assessment of farmland saves from destitution.
The privilege of use-value
assessment stretches even beyond
farmlands, vast as they are. Timberland
in most states gets the
same preferred treatment, only better. About 1/3 of
owned land in the U.S. is in timber. In California, owners
huge corporations) may put the land into the "TPZ" class. The
standing timber is then exempt, and taxed only at harvest, at 2.9%,
much too low a rate to make up for a 60-year lifetime of exemption.
County assessors have to value the land separately on its putative
value for growing timber, following a State-legislated formula that
is tailored drastically to understate even that low value (California
Revenue and Tax Code, Section 434.5). Much
of that land, though, has
alternative uses, e.g. for retirement and vacation homes and resorts,
the outliers and pioneers of urban sprawl. There are also mineral
values, hunting, fishing, rifle ranges, grazing, campsites, tourism,
rights of way, lumber camps, loading sites, water sources, lakes, log
storage, landings - there are many things to do with 1/3 of a
nation's land. Those uses are
all declared "compatible" with timber,
hence land values derived therefrom are tax-exempt. Read
the whole article
Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place
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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper