Land is different from capital. One can always create more capital, but
none of us can create an additional downtown building lot. Those
who own the prime downtown land have a control over others' lives and,
under our current system, the privilege of collecting as their private
bounty
the payments on something they didn't create.
The board game Monopoly is based on a game created in
the early years of the 20th century called The
Landlord's Game, designed
to teach about the ills of land monopoly.
As Walt Rybeck puts it, most of us "don't know what's
eating us." Read on, and you'll begin to understand.
Thomas Paine, quoted by James Dundas White in a pamphlet
entitled "Land-Value
Policy"
"The earth, in its natural state … is supporting but a small
number of inhabitants, compared with what it is capable of doing in a
cultivated state. And impossible to separate the improvement made by
cultivation from the earth itself upon which that improvement is made,
the idea of landed property arose from that inseparable connection; but
it is nevertheless true that it is value of the improvement only, and
not the earth itself, that is individual property. Every proprietor,
therefore, of cultivated land owes to the community a ground-rent, for
I know no better term to express the idea by, for the land which he holds. …Cultivation
is one of the greatest natural improvements ever made. . . .But the landed
monopoly that began with it has dispossessed more than half the inhabitants
of every nation of their natural inheritance." [Thomas Paine, Agrarian
Justice, 1797]
Robert H. Browne: Abraham Lincoln
and the Men of His Time
“Christ knew better than we that 'No man having put his hand to
the plow and looking back is fit for the kingdom of God;' nor is many
man doing his duty who shrinks and is faithless to his fellow-men. Now
a word more about Abolitionists and new ideas in Government, whatever
they may be: We are all called Abolitionists now who desire any restriction
of slavery or believe that the system is wrong, as I have declared for
years. We are called so, not to help out a peaceful solution, but in
derision, to abase us, and enable the defamers to make successful combinations
against us. I never was much annoyed by these, less now than ever. I
favor the best plan to restrict the extension of slavery peacefully,
and fully believe that we must reach some plan that will do it, and provide
for some method of final extinction of the evil, before we can have permanent
peace on the subject. On other questions there is ample room for reform
when the time comes; but now it would be folly to think that we could
undertake more than we have on hand. But when slavery is over
with and settled, men should never rest content while oppressions, wrongs,
and iniquities are in force against them.
“The land, the earth that God gave to man for his home,
his sustenance, and support, should never be the possession of any
man, corporation, society, or unfriendly Government, any more than
the air or the water, if as much. An individual company or enterprise
requiring land should hold no more in their own right than is needed
for their home and sustenance, and never more than they have in actual
use in the prudent management of their legitimate business, and this
much should not be permitted when it creates an exclusive monopoly.
All that is not so used should be held for the free use of every family
to make homesteads, and to hold them as long as they are so occupied.
“A reform like this will be worked out some time in the
future. The idle talk of foolish men, that is so common now, on 'Abolitionists,
agitators, and disturbers of the peace,' will find its way against
it, with whatever force it may possess, and as strongly promoted and
carried on as it can be by land monopolists, grasping landlords, and
the titled and untitled senseless enemies of mankind everywhere.” ... read
extended excerpts
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)
For land is the habitation of man, the storehouse upon which he must
draw for all his needs, the material to which his labor must be applied
for
the supply of all his desires; for even the products of the sea cannot
be taken, the light of the sun enjoyed, or any of the forces of nature
utilized, without the use of land or its products. On the land we are
born, from it we live, to it we return again — children of the
soil as truly as is the blade of grass or the flower of the field. Take
away from
man all that belongs to land, and he is but a disembodied spirit. Material
progress cannot rid us of our dependence upon land; it can but add
to the power of producing wealth from land; and hence, when land
is monopolized,
it might go on to infinity without increasing wages or improving the
condition
of those who have but their labor. It can but add to the value
of land and the power which its possession gives. Everywhere, in all
times,
among all peoples, the possession of land is the base of aristocracy,
the foundation
of great fortunes, the source of power. ... read
the whole chapter
Poverty deepens as wealth increases, and wages are forced down while
productive power grows, because land, which is the source of all
wealth and the field of all labor, is monopolized. To extirpate poverty,
to make wages what justice commands they should be, the full earnings
of the laborer, we must therefore substitute for the individual ownership
of land a common ownership.*
*By the phrase "common ownership" of
land, Henry George did not mean that land should be held in common
or by the State, nor did he propose to interfere with the existing
system of land tenures. (See Sections 7 and 12, post.) As in
this condensation much of George's argument necessarily has been
omitted, the following extracts from his later work "Protection
or Free Trade," chapter XXVI, are appended to make his position
clear to the present reader.
"No one would sow a crop, or build
a house, or open a mine, or plant an orchard, or cut a drain,
so long as any one else could come in and turn him out of the
land in which or on which such improvement must be fixed. Thus
is it absolutely necessary to the proper use and improvement
of land that society should secure to the user and improver safe
possession. ... We can leave land now being used in the secure
possession of those using it. ... on condition that those who
hold land shall pay to the community a ... rent based on the
value of the privilege the individual receives from the community
in being accorded the exclusive use of this much of the common
property, and which should have no reference to any improvement
he has made in or on it, or to any profit due to the use of his
labor and capital. In this way all would be placed on an equality
in regard to the use and enjoyment of those natural elements
which are clearly the common heritage."
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty:
10. Effect of Remedy Upon Wealth Production (in the unabridged P&P: Part
IX — Effects of the Remedy: Chapter 1 — Of the effect upon
the
production of wealth)
The elder Mirabeau, we are told, ranked the proposition of Quesnay, to
substitute one single tax on rent (the impôt unique) for
all other taxes, as a discovery equal in utility to the invention of writing
or the substitution of the use of money for barter.
To whosoever will think over the matter, this saying will appear an evidence
of penetration rather than of extravagance. The advantages which would
be gained by substituting for the numerous taxes by which the public revenues
are now raised, a single tax levied upon the value of land, will appear
more and more important the more they are considered. ...
Consider the effect upon the production of wealth.
To abolish the taxation which, acting and reacting, now hampers every
wheel of exchange and presses upon every form of industry, would be like
removing an immense weight from a powerful spring. Imbued with fresh energy,
production would start into new life, and trade would receive a stimulus
which would be felt to the remotest arteries. The present method of taxation
operates upon exchange like artificial deserts and mountains;
- it costs more to get goods through a custom house than it does to
carry them around the world.
- It operates upon energy, and industry, and skill, and thrift, like
a fine upon those qualities.
- If I have worked harder and built myself a good house while you
have been contented to live in a hovel, the taxgatherer now comes annually
to make me pay a penalty for my energy and industry, by taxing
me more
than you.
- If I have saved while you wasted, I am mulct, while you are exempt.
- If a man build a ship we make him pay for his temerity, as though
he had done an injury to the state;
- if a railroad be opened, down comes the tax collector upon it, as
though it were a public nuisance;
- if a manufactory be erected we levy upon it an annual sum which
would go far toward making a handsome profit.
- We say we want capital, but if any one accumulate it, or bring it
among us, we charge him for it as though we were giving him a privilege.
- We punish with a tax the man who covers barren fields with ripening
grain,
- we fine him who puts up machinery, and him who drains a swamp.
How heavily these taxes burden production only those realize who have
attempted to follow our system of taxation through its ramifications, for,
as I have before said, the heaviest part of taxation is that which falls
in increased prices.
To abolish these taxes would be to lift the whole enormous weight of
taxation from productive industry. The needle of the seamstress and the
great manufactory;
the cart horse and the locomotive; the fishing boat and the steamship;
the farmer's plow and the merchant's stock, would be alike untaxed.
All would be free to make or to save, to buy or to sell, unfined by taxes,
unannoyed by the taxgatherer. Instead of saying to the producer, as
it
does now, "The more you add to the general wealth the more shall you
be taxed!" the state would say to the producer, "Be as industrious,
as thrifty, as enterprising as you choose, you shall have your full
reward! You shall not be fined for making two blades of grass grow
where one grew
before; you shall not be taxed for adding to the aggregate wealth."
And will not the community gain by thus refusing to kill the goose that
lays the golden eggs; by thus refraining from muzzling the ox that treadeth
out the corn; by thus leaving to industry, and thrift, and skill, their
natural reward, full and unimpaired? For there is to the community also
a natural reward. The law of society is, each for all, as well as all for
each. No one can keep to himself the good he may do, any more than he can
keep the bad. Every productive enterprise, besides its return to those
who undertake it, yields collateral advantages to others. If a man plant
a fruit tree, his gain is that he gathers the fruit in its time and season.
But in addition to his gain, there is a gain to the whole community. Others
than the owner are benefited by the increased supply of fruit; the birds
which it shelters fly far and wide; the rain which it helps to attract
falls not alone on his field; and, even to the eye which rests upon it
from a distance, it brings a sense of beauty. And so with everything else.
The building of a house, a factory, a ship, or a railroad, benefits others
besides those who get the direct profits.
Well may the community leave to the individual producer all that prompts
him to exertion; well may it let the laborer have the full reward of his
labor, and the capitalist the full return of his capital. For the more
that labor and capital produce, the greater grows the common wealth in
which all may share. And in the value or rent of land is this general gain
expressed in a definite and concrete form. Here is a fund which the state
may take while leaving to labor and capital their full reward. With increased
activity of production this would commensurately increase.
And to shift the burden of taxation from production and exchange to the
value or rent of land would not merely be to give new stimulus to the production
of wealth; it would be to open new opportunities. For under this system
no one would care to hold land unless to use it, and land now withheld
from use would everywhere be thrown open to improvement. ...
And it must be remembered that this would apply, not merely to agricultural
land, but to all land. Mineral land would be thrown open to use, just as
agricultural land; and in the heart of a city no one could afford to keep
land from its most profitable use, or on the outskirts to demand more for
it than the use to which it could at the time be put would warrant. Everywhere
that land had attained a value, taxation, instead of operating, as now,
as a fine upon improvement, would operate to force improvement. Whoever
planted an orchard, or sowed a field, or built a house, or erected a manufactory,
no matter how costly, would have no more to pay in taxes than if he kept
so much land idle.
- The monopolist of agricultural land would be taxed as much as though
his land were covered with houses and barns, with crops and with
stock.
- The owner of a vacant city lot would have to pay as much for the
privilege of keeping other people off of it until he wanted to use
it, as his neighbor
who has a fine house upon his lot.
- It would cost as much to keep a row of tumble-down shanties upon
valuable land as though it were covered with a grand hotel or a pile
of great
warehouses filled with costly goods.
Thus, the bonus that wherever labor is most productive must now be paid
before labor can be exerted would disappear.
- The farmer would not have to pay out half his means, or mortgage
his labor for years, in order to obtain land to cultivate;
- the builder of a city homestead would not have to lay out as much
for a small lot as for the house he puts upon it*;
- the company that proposed to erect a manufactory would not have
to expend a great part of its capital for a site.
- And what would be paid from year to year to the state would be in
lieu of all the taxes now levied upon improvements, machinery,
and stock. ... read the whole chapter
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
But great as they thus appear, the advantages of a transference of all
public burdens to a tax upon the value of land cannot be fully appreciated
until we consider the effect upon the distribution of wealth.
Tracing out the cause of the unequal distribution of wealth which appears
in all civilized countries, with a constant tendency to greater and greater
inequality as material progress goes on, we have found it in the fact that,
as civilization advances, the ownership of land, now in private hands,
gives a greater and greater power of appropriating the wealth produced
by labor and capital.
Thus, to relieve labor and capital from all taxation, direct and indirect,
and to throw the burden upon rent, would be, as far as it went, to counteract
this tendency to inequality, and, if it went so far as to take in taxation
the whole of rent, the cause of inequality would be totally destroyed.
Rent, instead of causing inequality, as now, would then promote equality.
Labor and capital would then receive the whole produce, minus that portion
taken by the state in the taxation of land values, which, being applied
to public purposes, would be equally distributed in public benefits.
That is to say, the wealth produced in every community would be divided
into two portions.
- One part would be distributed in wages and interest between individual
producers, according to the part each had taken in the work of
production;
- the other part would go to the community as a whole, to be distributed
in public benefits to all its members.
In this all would share equally — the weak with the strong, young
children and decrepit old men, the maimed, the halt, and the blind, as
well as the vigorous. And justly so — for while one part represents
the result of individual effort in production, the other represents
the increased power with which the community as a whole aids the individual.
Thus, as material progress tends to increase rent, were rent taken by
the community for common purposes the very cause which now tends to produce
inequality as material progress goes on would then tend to produce greater
and greater equality.
Who can say to what infinite powers the wealth-producing capacity of labor
may not be raised by social adjustments which will give to the producers
of wealth their fair proportion of its advantages and enjoyments! With
present processes the gain would be simply incalculable, but just as wages
are high, so do the invention and utilization of improved processes and
machinery go on with greater rapidity and ease.
But I shall not deny, and do not wish to lose sight of the fact, that
while thus preventing waste and thus adding to the efficiency of labor,
the equalization in the distribution of wealth that would result from
the simple plan of taxation that I propose, must lessen the intensity
with
which wealth is pursued. It seems to me that in a condition of society
in which no one need fear poverty, no one would desire great wealth — at
least, no one would take the trouble to strive and to strain for it
as men do now. For, certainly, the spectacle of men who have only a
few years
to live, slaving away their time for the sake of dying rich, is in
itself so unnatural and absurd, that in a state of society where the
abolition
of the fear of want had dissipated the envious admiration with which
the masses of men now regard the possession of great riches, whoever
would
toil to acquire more than he cared to use would be looked upon as we
would now look on a man who would thatch his head with half a dozen
hats.
And though this incentive to production be withdrawn, can we not spare
it? Whatever may have been its office in an earlier stage of development,
it is not needed now. The dangers that menace our civilization do not come
from the weakness of the springs of production. What it suffers from, and
what, if a remedy be not applied, it must die from, is unequal distribution!
Nor would the removal of this incentive, regarded only from the standpoint
of production, be an unmixed loss. For, that the aggregate of production
is greatly reduced by the greed with which riches are pursued, is one of
the most obtrusive facts of modern society. While, were this insane desire
to get rich at any cost lessened, mental activities now devoted to scraping
together riches would be translated into far higher spheres of usefulness.
... read the whole chapter
H.G. Brown: Significant
Paragraphs from Henry George's Progress & Poverty:
14 Liberty, and Equality of Opportunity (in the unabridged P&P: Part
X: The Law of Human Progress — Chapter 5: The Central Truth)
The truth to which we were led in the politico-economic branch of our
inquiry is as clearly apparent in the rise and fall of nations and the
growth and decay of civilizations, and it accords with those deep-seated
recognitions of relation and sequence that we denominate moral perceptions.
Thus are given to our conclusions the greatest certitude and highest sanction.
This truth involves both a menace and a promise. It shows that the evils
arising from the unjust and unequal distribution of wealth, which are becoming
more and more apparent as modern civilization goes on, are not incidents
of progress, but tendencies which must bring progress to a halt; that they
will not cure themselves, but, on the contrary, must, unless their cause
is removed, grow greater and greater, until they sweep us back into barbarism
by the road every previous civilization has trod. But it also shows that
these evils are not imposed by natural laws; that they spring solely from
social maladjustments which ignore natural laws, and that in removing their
cause we shall be giving an enormous impetus to progress.
The poverty which in the midst of abundance pinches and embrutes men,
and all the manifold evils which flow from it, spring from a denial of
justice. In permitting the monopolization of the opportunities
which nature freely offers to all, we have ignored the fundamental law
of justice — for,
so far as we can see, when we view things upon a large scale, justice seems
to be the supreme law of the universe. But by sweeping away this injustice
and asserting the rights of all men to natural opportunities, we shall
conform ourselves to the law —
- we shall remove the great cause of unnatural inequality in the distribution
of wealth and power;
- we shall abolish poverty;
- tame the ruthless passions of greed;
- dry up the springs of vice and misery;
- light in dark places the lamp of knowledge;
- give new vigor to invention and a fresh impulse to discovery;
- substitute political strength for political weakness; and
- make tyranny and anarchy impossible.
The reform I have proposed accords with all that is politically, socially,
or morally desirable. It has the qualities of a true reform, for it
will make all other reforms easier. What is it but the carrying out in
letter
and spirit of the truth enunciated in the Declaration of Independence — the "self-evident" truth
that is the heart and soul of the Declaration —"That all
men are created equal; that they are endowed by their Creator with
certain
inalienable rights; that among these are life, liberty, and the pursuit
of happiness!"
These rights are denied when the equal right to land — on which
and by which men alone can live — is denied. Equality of political
rights will not compensate for the denial of the equal right to the bounty
of nature. Political liberty, when the equal right to land is denied, becomes,
as population increases and invention goes on, merely the liberty to compete
for employment at starvation wages. This is the truth that we have ignored.
And so
- there come beggars in our streets and tramps on our roads; and
- poverty enslaves men who we boast are political sovereigns; and
- want breeds ignorance that our schools cannot enlighten; and
- citizens vote as their masters dictate; and
- the demagogue usurps the part of the statesman; and
- gold weighs in the scales of justice; and
- in high places sit those who do not pay to civic virtue even the
compliment of hypocrisy; and
- the pillars of the republic that we thought so strong already bend
under an increasing strain.
We honor Liberty in name and in form. We set up her statues and sound
her praises. But we have not fully trusted her. And with our growth so
grow her
demands. She will have no half service!
Liberty! it is a word to conjure with, not to vex the ear in empty boastings.
For Liberty means Justice, and Justice is the natural law — the
law of health and symmetry and strength, of fraternity and co-operation.
They who look upon Liberty as having accomplished her mission when she
has abolished hereditary privileges and given men the ballot, who think
of her as having no further relations to the everyday affairs of life,
have not seen her real grandeur — to them the poets who have
sung of her must seem rhapsodists, and her martyrs fools! As the sun
is the
lord of life, as well as of light; as his beams not merely pierce the
clouds, but support all growth, supply all motion, and call forth from
what would
otherwise be a cold and inert mass all the infinite diversities of
being and beauty, so is liberty to mankind. It is not for an abstraction
that
men have toiled and died; that in every age the witnesses of Liberty
have stood forth, and the martyrs of Liberty have suffered.
We speak of Liberty as one thing, and of virtue, wealth, knowledge, invention,
national strength, and national independence as other things. But, of all
these, Liberty is the source, the mother, the necessary condition. ...
Only in broken gleams and partial light has the sun of Liberty yet beamed
among men, but all progress hath she called forth. ...
Shall we not trust her?
In our time, as in times before, creep on the insidious forces that, producing
inequality, destroy Liberty. On the horizon the clouds begin to lower.
Liberty calls to us again. We must follow her further; we must
trust her fully. Either we must wholly accept her or she will not stay.
It is not
enough that men should vote; it is not enough that they should be theoretically
equal before the law. They must have liberty to avail themselves of the
opportunities and means of life; they must stand on equal terms with reference
to the bounty of nature. Either this, or Liberty withdraws her light! Either
this, or darkness comes on, and the very forces that progress has evolved
turn to powers that work destruction. This is the universal law. This is
the lesson of the centuries. Unless its foundations be laid in justice
the social structure cannot stand.
Our primary social adjustment is a denial of justice. In allowing
one man to own the land on which and from which other men must live,
we have
made them his bondsmen in a degree which increases as material progress
goes on. This is the subtile alchemy that in ways they do not realize is
extracting from the masses in every civilized country the fruits of their
weary toil; that is instituting a harder and more hopeless slavery in place
of that which has been destroyed; that is bringing political despotism
out of political freedom, and must soon transmute democratic institutions
into anarchy.
It is this that turns the blessings of material progress into
a curse.
It is this that crowds human beings into noisome cellars and squalid tenement
houses; that fills prisons and brothels; that goads men with want and consumes
them with greed; that robs women of the grace and beauty of perfect womanhood;
that takes from little children the joy and innocence of life's morning.
Civilization so based cannot continue. The eternal
laws of the universe forbid it. Ruins of dead empires testify, and the
witness that is in every
soul answers, that it cannot be. It is something grander than Benevolence,
something more august than Charity — it is Justice herself that demands
of us to right this wrong. Justice that will not be denied; that cannot
be put off — Justice that with the scales carries the sword.
Shall we ward the stroke with liturgies and prayers? Shall we avert
the decrees
of immutable law by raising churches when hungry infants moan and weary
mothers weep?
Though it may take the language of prayer, it is blasphemy that
attributes to the inscrutable decrees of Providence the suffering and
brutishness that come of poverty; that turns with folded hands to the
All-Father and lays on Him the responsibility for the want and crime
of our great cities. We degrade the Everlasting. We slander
the Just One. A merciful man would have better ordered the world; a
just man would crush with his foot such an ulcerous ant-hill! It is
not the
Almighty, but we who are responsible for the vice and misery that fester
amid our civilization. The Creator showers upon us his gifts — more
than enough for all. But like swine scrambling for food, we tread them
in the mire — tread them in the mire, while we tear and rend
each other!
In the very centers of our civilization today are want and suffering
enough to make sick at heart whoever does not close his eyes and steel
his nerves. Dare we turn to the Creator and ask Him to relieve it? Supposing
the prayer were heard, and at the behest with which the universe sprang
into being there should glow in the sun a greater power; new virtue fill
the air; fresh vigor the soil; that for every blade of grass that now
grows two should spring up, and the seed that now increases fiftyfold
should increase a hundredfold! Would poverty be abated or want relieved?
Manifestly no! Whatever benefit would accrue would be but temporary.
The new powers streaming through the material universe could be utilized
only through land.
This is not merely a deduction of political economy; it is a fact of experience. We
know it because we have seen it. Within our own times, under
our very eyes, that Power which is above all, and in all, and through
all; that Power of which the whole universe is but the manifestation;
that Power which maketh all things, and without which is not anything
made that is made, has increased the bounty which men may enjoy, as truly
as though the fertility of nature had been increased.
- Into the mind of one came the thought that harnessed steam for the
service of mankind.
- To the inner ear of another was whispered the secret that compels
the lightning to bear a message round the globe.
- In every direction have the laws of matter been revealed;
- in every department of industry have arisen arms of iron and fingers
of steel, whose effect upon the production of wealth has been precisely
the same as an increase in the fertility of nature.
What has been the result? Simply that landowners get all the gain.
Can it be that the gifts of the Creator may be thus misappropriated
with impunity? Is it a light thing that labor should be robbed of its
earnings while greed rolls in wealth — that the many should want
while the few are surfeited? Turn to history, and on every
page may be read the lesson that such wrong never goes unpunished;
that the
Nemesis that follows injustice never falters nor sleeps! Look around
today. Can this state of things continue? May we even say, "After
us the deluge!" Nay; the pillars of the State are trembling even
now, and the very foundations of society begin to quiver with pent-up
forces that glow underneath. The struggle that must either revivify,
or convulse in ruin, is near at hand, if it be not already begun.
The fiat has gone forth! With steam and electricity, and the new powers
born of progress, forces have entered the world that will either compel
us to a higher plane or overwhelm us, as nation after nation, as civilization
after civilization, have been overwhelmed before. ...
- We cannot go on permitting men to vote and forcing them to tramp.
- We cannot go on educating boys and girls in our public schools and
then refusing them the right to earn an honest living.
- We cannot go on prating of the inalienable rights of man and then
denying the inalienable right to the bounty of the Creator.
Even now, in old bottles the new wine begins to ferment, and elemental
forces gather for the strife!
But if, while there is yet time, we turn to Justice and obey her,
if we trust Liberty and follow her, the dangers that now threaten must
disappear, the forces that now menace will turn to agencies of elevation. Think
of the powers now wasted; of the infinite fields of knowledge yet to
be explored; of the possibilities of which the wondrous inventions of
this century give us but a hint.
- With want destroyed;
- with greed changed to noble passions;
- with the fraternity that is born of equality taking the place of
the jealousy and fear that now array men against each other;
- with mental power loosed by conditions that give to the humblest
comfort and leisure; and
- who shall measure the heights to which our civilization may soar?
Words fail the thought! It is the Golden Age of which poets have
sung and high-raised seers have told in metaphor! It is the glorious
vision which has always haunted man with gleams of fitful splendor. It
is what he saw whose eyes at Patmos were closed in a trance. It is the
culmination of Christianity — the City of God on earth, with its
walls of jasper and its gates of pearl! It is the reign of the Prince
of Peace! ... read the whole
chapter
Henry George: Concentrations of
Wealth Harm America (excerpt
from Social Problems) (1883)
Sources of Great Wealth
An acquaintance of mine died in San Francisco
recently, leaving $4,000,000, which will go to heirs to be looked up in England.
I have known many men more industrious, more skilful, more temperate than
he -- men who did not or who will not leave a cent. This man did not get
his wealth by his industry, skill or temperance. He no more produced it than
did those lucky relations in England who may now do nothing for the rest
of their lives. He became rich by getting hold of a piece of land in the
early days, which, as San Francisco grew, became very valuable. His wealth
represented not what he had earned, but what the monopoly of this bit of
the earth's surface enabled him to appropriate of the earnings of others.
A man died in Pittsburgh, the other day,
leaving $3,000,000. He may or may not have been particularly industrious,
skilful and economical, but it was not by virtue of these qualities that
he got so rich. It was because he went to Washington and helped lobby through
a bill which, by way of "protecting American workmen against the pauper labor
of Europe," gave him the advantage of a sixty-per-cent, tariff. To the day
of his death he was a stanch protectionist, and said free trade would ruin
our "infant industries." Evidently the $3,000,000 which he was enabled to
lay by from his own little cherub of an "infant industry" did not represent
what he had added to production. It was the advantage given him by the tariff
that enabled him to scoop it up from other people's earnings.
"Beneath all political problems lies the social problem of the distribution
of wealth."
This element of monopoly, of appropriation
and spoliation will, when we come to analyze them, be found largely to account
for all great fortunes....
Take the great Vanderbilt fortune. The
first Vanderbilt was a boatman who earned money by hard work and saved it.
But it was not working and saving that enabled him to leave such an enormous
fortune. It was spoliation and monopoly. As soon as he got money enough he
used it as a club to extort from others their earnings. He ran off opposition
lines and monopolized routes of steamboat travel. Then he went into railroads,
pursuing the same tactics. The Vanderbilt fortune no more comes from working
and saving than did the fortune that Captain Kidd buried.
Or take the great Gould fortune. Mr. Gould
might have got his first little start by superior industry and superior self-denial.
But it is not that which has made him the master of a hundred millions. It
was by wrecking railroads, buying judges, corrupting legislatures, getting
up rings and pools and combinations to raise or depress stock values and
transportation rates.
So, like wise, of the great fortunes which
the Pacific railroads have created. They have been made by lobbying through
profligate donations of lands, bonds and subsidies, by the operations of
Credit Mobilier and Contract and Finance Companies, by monopolizing and gouging.
And so of fortunes made by such combinations as the Standard Oil Company,
the Bessemer Steel Ring, the Whisky Tax Ring, the Lucifer Match Ring, and
the various rings for the "protection of the American workman from the pauper
labor of Europe."
Or take the fortunes made out of successful
patents. Like that element in so many fortunes that comes from the increased
value of land, these result from monopoly, pure and simple. And though I
am not now discussing the expediency of patent laws, it may be observed,
in passing, that in the vast majority of cases the men who make fortunes
out of patents are not the men who make the inventions.
Through all great fortunes, and, in fact,
through nearly all acquisitions that in these days can fairly be termed fortunes,
these elements of monopoly, of spoliation, of gambling run. The head of one
of the largest manufacturing firms in the United States said to me recently, "It
is not on our ordinary business that we make our money; it is where we can
get a monopoly." And this, I think, is generally true.
The Evils of Monopolists
Consider the important part in building up fortunes which the increase
of land values has had, and is having, in the United States. This is, of course,
monopoly, pure and simple. When land increases in value it does not mean that
its owner has added to the general wealth. The owner may never have seen the
land or done aught to improve it. He may, and often does, live in a distant
city or in another country. Increase of land values simply means that the owners,
by virtue of their appropriation of something that existed before man was,
have the power of taking a larger share of the wealth produced by other people's
labor. Consider how much the monopolies created and the advantages given to
the unscrupulous by the tariff and by our system of internal taxation -- how
much the railroad (a business in its nature a monopoly), telegraph, gas, water
and other similar monopolies, have done to concentrate wealth; how special
rates, pools, combinations, corners, stock-watering and stock-gambling, the
destructive use of wealth in driving off or buying off opposition which the
public must finally pay for, and many other things which these will suggest,
have operated to build up large fortunes, and it will at least appear that
the unequal distribution of wealth is due in great measure to sheer spoliation;
that the reason why those who work hard get so little, while so many who work
little get so much, is, in very large measure, that the earnings of the one
class are, in one way or another, filched away from them to swell the incomes
of the other.
That individuals are constantly making
their way from the ranks of those who get less than their earnings to the
ranks of those who get more than their earnings, no more proves this state
of things right than the fact that merchant sailors were constantly becoming
pirates and participating in the profits of piracy, would prove that piracy
was right and that no effort should be made to suppress it.
I am not denouncing the rich, nor seeking,
by speaking of these things, to excite envy and hatred; but if we would get
a clear understanding of social problems, we must recognize the fact that
it is due to monopolies which we permit and create, to advantages which we
give one man over another, to methods of extortion sanctioned by law and
by public opinion, that some men are enabled to get so enormously rich while
others remain so miserably poor. If we look around us and note the elements
of monopoly, extortion and spoliation which go to the building up of all,
or nearly all, fortunes, we see on the one hand now disingenuous are those
who preach to us that there is nothing wrong in social relations and that
the inequalities in the distribution of wealth spring from the inequalities
of human nature; and on the other hand, we see how wild are those who talk
as though capital were a public enemy, and propose plans for arbitrarily
restricting the acquisition of wealth. Capital is a good; the capitalist
is a helper, if he is not also a monopolist. We can safely let any one get
as rich as he can if he will not despoil others in doing so.
There are deep wrongs in the present constitution
of society, but they are not wrongs inherent in the constitution of man nor
in those social laws which are as truly the laws of the Creator as are the
laws of the physical universe. They are wrongs resulting from bad adjustments
which it is within our power to amend. The ideal social state is not that
in which each gets an equal amount of wealth, but in which each gets in proportion
to his contribution to the general stock. And in such a social state there
would not be less incentive to exertion than now; there would be far more
incentive. Men will be more industrious and more moral, better workmen and
better citizens, if each takes his earnings and carries them home to his
family, than where they put their earnings in a "pot" and gamble for them
until some have far more than they could have earned, and others have little
or nothing. ... Read the entire article
Henry George: The Condition of
Labor — An Open Letter to Pope Leo XIII in response to Rerum Novarum (1891)
Nor do we hesitate to say that this way of securing the equal right to the
bounty of the Creator and the exclusive right to the products of labor is
the way intended by God for raising public revenues. For we are not atheists,
who deny God; nor semi-atheists, who deny that he has any concern in politics
and legislation.
It is true as you say — a salutary truth too often forgotten — that “man
is older than the state, and he holds the right of providing for the life
of his body prior to the formation of any state.” Yet, as you too perceive,
it is also true that the state is in the divinely appointed order. For He
who foresaw all things and provided for all things, foresaw and provided
that with the increase of population and the development of industry the
organization of human society into states or governments would become both
expedient and necessary.
No sooner does the state arise than, as we all know, it needs revenues.
This need for revenues is small at first, while population is sparse, industry
rude and the functions of the state few and simple. But with growth of population
and advance of civilization the functions of the state increase and larger
and larger revenues are needed.
Now, He that made the world and placed man in it, He that pre-ordained civilization
as the means whereby man might rise to higher powers and become more and
more conscious of the works of his Creator, must have foreseen this increasing
need for state revenues and have made provision for it. That is to say: The
increasing need for public revenues with social advance, being a natural,
God-ordained need, there must be a right way of raising them — some
way that we can truly say is the way intended by God. It is clear that this
right way of raising public revenues must accord with the moral law.
Hence:
It must not take from individuals what rightfully belongs to individuals.
It must not give some an advantage over others, as by increasing the prices
of what some have to sell and others must buy.
It must not lead men into temptation, by requiring trivial oaths, by making
it profitable to lie, to swear falsely, to bribe or to take bribes.
It must not confuse the distinctions of right and wrong, and weaken the
sanctions of religion and the state by creating crimes that are not sins,
and punishing men for doing what in itself they have an undoubted right to
do.
It must not repress industry. It must not check commerce. It must not punish
thrift. It must offer no impediment to the largest production and the fairest
division of wealth.
Let me ask your Holiness to consider the taxes on the processes and products
of industry by which through the civilized world public revenues are collected — the
octroi duties that surround Italian cities with barriers; the monstrous customs
duties that hamper intercourse between so-called Christian states; the taxes
on occupations, on earnings, on investments, on the building of houses, on
the cultivation of fields, on industry and thrift in all forms. Can these
be the ways God has intended that governments should raise the means they
need? Have any of them the characteristics indispensable in any plan we can
deem a right one?
All these taxes violate the moral law. They take by force what belongs to
the individual alone; they give to the unscrupulous an advantage over the
scrupulous; they have the effect, nay are largely intended, to increase the
price of what some have to sell and others must buy; they corrupt government;
they make oaths a mockery; they shackle commerce; they fine industry and
thrift; they lessen the wealth that men might enjoy, and enrich some by impoverishing
others.
Yet what most strikingly shows how opposed to Christianity is this system
of raising public revenues is its influence on thought.
Christianity teaches us that all men are brethren; that their true interests
are harmonious, not antagonistic. It gives us, as the golden rule of life,
that we should do to others as we would have others do to us. But out of
the system of taxing the products and processes of labor, and out of its
effects in increasing the price of what some have to sell and others must
buy, has grown the theory of “protection,” which denies this
gospel, which holds Christ ignorant of political economy and proclaims laws
of national well-being utterly at variance with his teaching. This theory
sanctifies national hatreds; it inculcates a universal war of hostile tariffs;
it teaches peoples that their prosperity lies in imposing on the productions
of other peoples restrictions they do not wish imposed on their own; and
instead of the Christian doctrine of man’s brotherhood it makes injury
of foreigners a civic virtue.
“By their fruits ye shall know them.” Can anything more clearly
show that to tax the products and processes of industry is not the way God
intended public revenues to be raised?
But to consider what we propose — the raising of public revenues by
a single tax on the value of land irrespective of improvements — is
to see that in all respects this does conform to the moral law.
Let me ask your Holiness to keep in mind that the value we propose to tax,
the value of land irrespective of improvements, does not come from any exertion
of labor or investment of capital on or in it — the values produced
in this way being values of improvement which we would exempt. The value
of land irrespective of improvement is the value that attaches to land by
reason of increasing population and social progress. This is a value that
always goes to the owner as owner, and never does and never can go to the
user; for if the user be a different person from the owner he must always
pay the owner for it in rent or in purchase-money; while if the user be also
the owner, it is as owner, not as user, that he receives it, and by selling
or renting the land he can, as owner, continue to receive it after he ceases
to be a user.
Thus, taxes on land irrespective of improvement cannot lessen the rewards
of industry, nor add to prices,* nor in any way take from the individual
what belongs to the individual. They can take only the value that attaches
to land by the growth of the community, and which therefore belongs to the
community as a whole.
* As to this point it may be well to add that all economists
are agreed that taxes on land values irrespective of improvement or use — or
what in the terminology of political economy is styled rent, a term distinguished
from the ordinary use of the word rent by being applied solely to payments
for the use of land itself — must be paid by the owner and cannot
be shifted by him on the user. To explain in another way the reason given
in the text: Price is not determined by the will of the seller or the
will of the buyer, but by the equation of demand and supply, and therefore
as to things constantly demanded and constantly produced rests at a point
determined by the cost of production — whatever tends to increase
the cost of bringing fresh quantities of such articles to the consumer
increasing price by checking supply, and whatever tends to reduce such
cost decreasing price by increasing supply. Thus taxes on wheat or tobacco
or cloth add to the price that the consumer must pay, and thus the cheapening
in the cost of producing steel which improved processes have made in
recent years has greatly reduced the price of steel. But land has no
cost of production, since it is created by God, not produced by man.
Its price therefore is fixed —
1 (monopoly rent), where land is held in close monopoly,
by what the owners can extract from the users under penalty of deprivation
and consequently of starvation, and amounts to all that common labor
can earn on it beyond what is necessary to life;
2 (economic rent proper), where there is no special monopoly, by what the
particular land will yield to common labor over and above what may be had
by like expenditure and exertion on land having no special advantage and
for which no rent is paid; and,
3 (speculative rent, which is a species of monopoly rent, telling particularly
in selling price), by the expectation of future increase of value from
social growth and improvement, which expectation causing landowners to
withhold land at present prices has the same effect as combination.
Taxes on land values or economic rent can therefore never
be shifted by the landowner to the land-user, since they in no wise increase
the demand for land or enable landowners to check supply by withholding
land from use. Where rent depends on mere monopolization, a case I mention
because rent may in this way be demanded for the use of land even before
economic or natural rent arises, the taking by taxation of what the landowners
were able to extort from labor could not enable them to extort any more,
since laborers, if not left enough to live on, will die. So, in the case
of economic rent proper, to take from the landowners the premiums they
receive, would in no way increase the superiority of their land and the
demand for it. While, so far as price is affected by speculative rent,
to compel the landowners to pay taxes on the value of land whether they
were getting any income from it or not, would make it more difficult
for them to withhold land from use; and to tax the full value would not
merely destroy the power but the desire to do so.
To take land values for the state, abolishing all taxes on the products
of labor, would therefore leave to the laborer the full produce of labor;
to the individual all that rightfully belongs to the individual. It would
impose no burden on industry, no check on commerce, no punishment on thrift;
it would secure the largest production and the fairest distribution of wealth,
by leaving men free to produce and to exchange as they please, without any
artificial enhancement of prices; and by taking for public purposes a value
that cannot be carried off, that cannot be hidden, that of all values is
most easily ascertained and most certainly and cheaply collected, it would
enormously lessen the number of officials, dispense with oaths, do away with
temptations to bribery and evasion, and abolish man-made crimes in themselves
innocent.
But, further: That God has intended the state to obtain the revenues it
needs by the taxation of land values is shown by the same order and degree
of evidence that shows that God has intended the milk of the mother for the
nourishment of the babe.
See how close is the analogy. In that primitive condition ere the need for
the state arises there are no land values. The products of labor have value,
but in the sparsity of population no value as yet attaches to land itself.
But as increasing density of population and increasing elaboration of industry
necessitate the organization of the state, with its need for revenues, value
begins to attach to land. As population still increases and industry grows
more elaborate, so the needs for public revenues increase. And at the same
time and from the same causes land values increase. The connection is invariable.
The value of things produced by labor tends to decline with social development,
since the larger scale of production and the improvement of processes tend
steadily to reduce their cost. But the value of land on which population
centers goes up and up. Take Rome or Paris or London or New York or Melbourne.
Consider the enormous value of land in such cities as compared with the value
of land in sparsely settled parts of the same countries. To what is this
due? Is it not due to the density and activity of the populations of those
cities — to the very causes that require great public expenditure for
streets, drains, public buildings, and all the many things needed for the
health, convenience and safety of such great cities? See how with the growth
of such cities the one thing that steadily increases in value is land; how
the opening of roads, the building of railways, the making of any public
improvement, adds to the value of land. Is it not clear that here is a natural
law — that is to say a tendency willed by the Creator? Can it mean
anything else than that He who ordained the state with its needs has in the
values which attach to land provided the means to meet those needs?
That it does mean this and nothing else is confirmed if we look deeper still,
and inquire not merely as to the intent, but as to the purpose of the intent.
If we do so we may see in this natural law by which land values increase
with the growth of society not only such a perfectly adapted provision for
the needs of society as gratifies our intellectual perceptions by showing
us the wisdom of the Creator, but a purpose with regard to the individual
that gratifies our moral perceptions by opening to us a glimpse of his beneficence.
Consider: Here is a natural law by which as society advances the one thing
that increases in value is land — a natural law by virtue of which
all growth of population, all advance of the arts, all general improvements
of whatever kind, add to a fund that both the commands of justice and the
dictates of expediency prompt us to take for the common uses of society.
Now, since increase in the fund available for the common uses of society
is increase in the gain that goes equally to each member of society, is it
not clear that the law by which land values increase with social advance
while the value of the products of labor does not increase, tends with the
advance of civilization to make the share that goes equally to each member
of society more and more important as compared with what goes to him from
his individual earnings, and thus to make the advance of civilization lessen
relatively the differences that in a ruder social state must exist between
the strong and the weak, the fortunate and the unfortunate? Does it not show
the purpose of the Creator to be that the advance of man in civilization
should be an advance not merely to larger powers but to a greater and greater
equality, instead of what we, by our ignoring of his intent, are making it,
an advance toward a more and more monstrous inequality? ...
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. ...
I have already referred generally to the defects that attach to all socialistic
remedies for the evil condition of labor, but respect for your Holiness dictates
that I should speak specifically, even though briefly, of the remedies proposed
or suggested by you.
Of these, the widest and strongest are that the state should restrict the
hours of labor, the employment of women and children, the unsanitary conditions
of workshops, etc. Yet how little may in this way be accomplished.
A strong, absolute ruler might hope by such regulations to alleviate the
conditions of chattel slaves. But the tendency of our times is toward democracy,
and democratic states are necessarily weaker in paternalism, while in the
industrial slavery, growing out of private ownership of land, that prevails
in Christendom today, it is not the master who forces the slave to labor,
but the slave who urges the master to let him labor. Thus the greatest difficulty
in enforcing such regulations comes from those whom they are intended to
benefit. It is not, for instance, the masters who make it difficult to enforce
restrictions on child labor in factories, but the mothers, who, prompted
by poverty, misrepresent the ages of their children even to the masters,
and teach the children to misrepresent.
But while in large factories and mines regulations as to hours, ages, etc.,
though subject to evasion and offering opportunities for extortion and corruption,
may be to some extent enforced, how can they have any effect in those far
wider branches of industry where the laborer works for himself or for small
employers?
All such remedies are of the nature of the remedy for overcrowding that
is generally prescribed with them — the restriction under penalty of
the number who may occupy a room and the demolition of unsanitary buildings.
Since these measures have no tendency to increase house accommodation or
to augment ability to pay for it, the overcrowding that is forced back in
some places goes on in other places and to a worse degree. All such remedies
begin at the wrong end. They are like putting on brake and bit to hold in
quietness horses that are being lashed into frenzy; they are like trying
to stop a locomotive by holding its wheels instead of shutting off steam;
like attempting to cure smallpox by driving back its pustules. Men do not
overwork themselves because they like it; it is not in the nature of the
mother’s heart to send children to work when they ought to be at play;
it is not of choice that laborers will work under dangerous and unsanitary
conditions. These things, like overcrowding, come from the sting of poverty.
And so long as the poverty of which they are the expression is left untouched,
restrictions such as you indorse can have only partial and evanescent results.
The cause remaining, repression in one place can only bring out its effects
in other places, and the task you assign to the state is as hopeless as to
ask it to lower the level of the ocean by bailing out the sea.
Nor can the state cure poverty by regulating wages. It is as much beyond
the power of the state to regulate wages as it is to regulate the rates of
interest. Usury laws have been tried again and again, but the only effect
they have ever had has been to increase what the poorer borrowers must pay,
and for the same reasons that all attempts to lower by regulation the price
of goods have always resulted merely in increasing them. The general rate
of wages is fixed by the ease or difficulty with which labor can obtain access
to land, ranging from the full earnings of labor, where land is free, to
the least on which laborers can live and reproduce, where land is fully monopolized.
Thus, where it has been comparatively easy for laborers to get land, as in
the United States and in Australasia, wages have been higher than in Europe
and it has been impossible to get European laborers to work there for wages
that they would gladly accept at home; while as monopolization goes on under
the influence of private property in land, wages tend to fall, and the social
conditions of Europe to appear. Thus, under the partial yet substantial recognition
of common rights to land, of which I have spoken, the many attempts of the
British Parliament to reduce wages by regulation failed utterly. And so,
when the institution of private property in land had done its work in England,
all attempts of Parliament to raise wages proved unavailing. In the beginning
of this century it was even attempted to increase the earnings of laborers
by grants in aid of wages. But the only result was to lower commensurately
what wages employers paid.
The state could maintain wages above the tendency of the market (for as
I have shown labor deprived of land becomes a commodity), only by offering
employment to all who wish it; or by lending its sanction to strikes and
supporting them with its funds. Thus it is, that the thoroughgoing socialists
who want the state to take all industry into its hands are much more logical
than those timid socialists who propose that the state should regulate private
industry — but only a little.
The same hopelessness attends your suggestion that working-people should
be encouraged by the state in obtaining a share of the land. It is evident
that by this you mean that, as is now being attempted in Ireland, the state
shall buy out large landowners in favor of small ones, establishing what
are known as 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 even 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 for those not so favored, and for those who will come after, to
get land? How, moreover, on the principle which you declare (36), that “to
the state the interests of all are equal, whether high or low,” will
you justify state aid to one man to buy a bit of land without also insisting
on state aid to another man to buy a donkey, to another to buy a shop, to
another to buy the tools and materials of a trade — state aid in short
to everybody who may be able to make good use of it or thinks that he could?
And are you not thus landed in communism — not the communism of the
early Christians and of the religious orders, but communism that uses the
coercive power of the state to take rightful property by force from those
who have, to give to those who have not? For the state has no purse of Fortunatus;
the state cannot repeat the miracle of the loaves and fishes; all that the
state can give, it must get by some form or other of the taxing power. And
whether it gives or lends money, or gives or lends credit, it cannot give
to those who have not, without taking from those who have.
But aside from all this, any scheme of dividing up land while maintaining
private property in land is futile. Small holdings cannot coexist with the
treatment of land as private property where civilization 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.
What the British government is attempting in Ireland is to build snow-houses
in the Arabian desert! to plant bananas in Labrador!
There is one way, and only one way, in which working-people in our
civilization 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 landownership for the
community. ... read
the whole letter
Henry George: In Liverpool: The Financial
Reform Meeting at the Liverpool Rotunda (1889)
It is the old, old story! And no wonder, for property
in land is just as absurd! just as monstrous as property in human beings.
(Hear, hear, and cheers) What
difference does it make whether you enslave a man by making his flesh
and blood the property of another, or whether you enslave him by making
the
property
of another that element on which and from which he must live if he is
to live at all? (A voice: "None whatever!" and cheers)
Why, in those old days slave ships used to set out from
this town of Liverpool for the coast of Africa to buy slaves. They
did not bring them to Liverpool;
they took them over to America. Why? Because you people were so good,
and the Englishmen who had got to the other side of the Atlantic, and
had
settled there,
were so bad? Not at all. I will tell you why the Liverpool ships carried
slaves to America and did not bring them back to England. Because in
America population
was sparse and land was plentiful. Therefore to rob a man of his labor — and
that is what the slaveowner wanted the slave for — you had got to catch
and hold the man. That is the reason the slaves went to America. The reason
they did not come here, the reason they were not carried over to Ireland was
that here population was relatively dense, land was relatively scarce and could
easily be monopolized, and to get out of the laborer all that his labor could
furnish, save only wages enough to keep him alive even the slaveowner had to
give this — it was only necessary to own land.
What is the difference, economically speaking, between
the slaves of South Carolina, Missouri, Mississippi, and Georgia and
the free peasantry of Ireland
or the agricultural laborer of England? (Cheers) Go to one of those slave
states in the slave days, and there you would find a planter, the owner
of five hundred
slaves, living in elegant luxury, without doing a stroke of work, having
a fine mansion, horses, [and a] carriage — all the things that
work produces, but doing none of it himself. The people who did the
work were living in negro
huts, on coarse food; they were clothed in coarse raiment. If they ran
away, he had the privilege of chasing them back, tying them up and
whipping them
and making them work.
Come to this side of the Atlantic, in a place where you saw the same state
of development. There you found also five hundred people living in little cabins,
eating coarse food, clothed in coarse raiment, working hard, yet getting only
enough of the things that work produces to keep them in good times, when bad
times came having to appeal to the world for charity. But you found among those
little cabins, too, the lordly mansion of the man who did no work. (Hear, hear,
and groans)
You found the mansion; you did not often find the man. (Laughter and cheers)
As a general rule he was off in London, or in Paris, enjoying himself on the
fruits of their labor. (Hear, hear) He had no legal right to make them work
for him. Oh! no. If they ran away he could not put bloodhounds on their track
and bring them back and whip them; but he had, in hunger, in starvation, a
ban dog40 more swift, more keen, more sure than the bloodhound of the south.
(Cheers)
The slaveowner of the south — the owner of men — had to make those
men work for him. He went to all that trouble. The landlord of Ireland did
not have to make men work for him. He owned the land, and without land men
cannot work; and so men would come to him — equal children of the Creator,
equal citizens of Great Britain — would come to him, with their
hats in their hands, and beg to be allowed to live on his land, to be
allowed
to work and to give to him all the produce of their work, except enough
to merely
keep them alive, and thank him for the privilege. . . . ... read the whole speech
Charles B. Fillebrown: A
Catechism of Natural Taxation, from Principles of Natural
Taxation (1917)
Q28. How are landlords privileged?
A. Because, in so far as their land tax is an "old" tax,
it is a burdenless tax, and because their buildings' tax is shifted
upon their tenants; most landlords who let land and also the tenement
houses and business blocks thereon avoid all share in the tax burden.
... read the whole article
Robert V. Andelson Henry
George and the Reconstruction of Capitalism
I have spoken of land monopoly as a cancer,
and so it is. Yet land often cannot be used efficiently unless monopolized.
The Georgist remedy does not provide for the excision of land monopoly but
rather for its transformation from malignant to benign. For the monopoly
of land can be fair and even salutary if the monopolizer pays into the public
treasury a sum that reflects substantially the market value of his privilege.
Perhaps this would be a good place
to interject that when economists speak of "land," they are talking about nature. The
term embraces not only space on the earth's surface but also natural resources
-- oil in the ground, virgin timber, wildlife, the oceans and other natural
bodies of water, the airwaves, airspace, etc. To capture for the public the
value of these natural goods, land-value charges may in some cases need to
be supplanted by or combined with other methods such as severance taxes and
auctioning of leases. But the principle is the same. Read
the whole article
Clarence Darrow: How to Abolish
Unfair Taxation (1913)
Everybody nowadays is anxious to help do something for
the poor, especially they who are on the backs of the poor; they will
do anything that is not fundamental.
Nobody ever dreams of giving the poor a chance to help themselves. The
reformers in this state have passed a law prohibiting women from working
more than eight
hours in one day in certain industries — so much do women love to
work that they must be stopped by law. If any benevolent heathen see fit
to come
here and do work, we send them to gaol or send them back where they came
from.
All these prohibitory laws are froth. You can only cure effects by curing
the cause. Every sin and every wrong that exists in the world is the product
of law, and you cannot cure it without curing the cause. Lawyers, as a class,
are very stupid. What would you think of a doctor, who, finding a case of malaria,
instead of draining the swamp, would send the patient to gaol, and leave the
swamp where it is? We are seeking to improve conditions of life by improving
symptoms.
Land Basic
No man created the earth, but to a large extent all take
from the earth a portion of it and mould it into useful things for the
use of man. Without land
man cannot live; without access to it man cannot labor. First of all, he
must have the earth, and this he cannot have access to until the single
tax is applied.
It has been proven by the history of the human race that the single tax
does work, and that it will work as its advocates claim. For instance,
man turned
from Europe, filled with a population of the poor, and discovered the great
continent of America. Here, when he could not get profitable employment,
he went on the free land and worked for himself, and in those early days
there
were no problems of poverty, no wonderfully rich and no extremely poor — because
there was cheap land. Men could go to work for themselves, and thus take the
surplus off the labor market. There were no beggars in the early days. It was
only when the landlord got in his work — when the earth monopoly was
complete — that the great mass of men had to look to a boss for a
job.
All the remedial laws on earth can scarcely help the poor when the
earth is monopolized. Men must live from the earth, they must till the soil,
dig the
coal and iron and cut down the forest. Wise men know it, and cunning men know
it, and so a few have reached out their hands and grasped the earth; and they
say, "These mines of coal and iron, which it took nature ages and ages
to store, belong to me; and no man can touch them until he sees fit to pay
the tribute I demand." ... read the whole speech
This earth is a little raft moving in the endless sea
of space, and the mass of its human inhabitants are hanging on as best
they can.
It is as if some raft filled with shipwrecked sailors should be
floating on the ocean, and a few of the strongest and most powerful would
take
all the raft they could get and leave the most of the people, especially
the ones who did the work, hanging to the edges by their eyebrows.
These men who have taken possession of this raft, this little planet
in this endless space, are not even content with taking all there
is and leaving the rest barely enough to hold onto, but they think so
much of themselves and their brief day that while they live they
must
make rules and laws and regulations that parcel out the earth for
thousands of years after they are dead and, gone, so that their descendants
and
others of their kind may do in the tenth generation exactly what
they are doing today — keeping the earth and all the good things
of the earth and compelling the great mass of mankind to toil for them.
Now, the question is, how are you going to get it back?
Everybody who thinks knows that private ownership of the land is wrong.
If ten
thousand men can own America, then one man can own it, and if one
man may own it he may take all that the rest produce or he may kill them
if he sees fit. It is inconsistent with the spirit of manhood. No
person
who thinks can doubt but that he was born upon this planet with the
same birthright that came to every man born like him. And it is for
him to defend that birthright. And the man who will not defend it,
whatever the cost, is fitted only to be a slave. The earth belongs
to the people — if they can get it — because if you cannot
get it, it makes no difference whether you have a right to it or
not, and if you can get it, it makes no difference whether you have
a right
to it or not, you just take it. The earth has been taken from the
many by the few. It made no difference that they had no right to
it; they
took it.
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. ... read
the whole article
Mark Twain Archimedes
"Give me whereon to
stand", said Archimedes, "and I will
move the earth." The boast was a pretty safe one, for he knew quite
well that the standing place was wanting, and always would be wanting.
But suppose he had moved the earth, what then? What benefit would it
have been to anybody?
... I know of a mechanical
force more powerful than anything the vaunting engineer of Syracuse
ever dreamed of. It is the force of land monopoly; it is a screw and
lever all in one; it will screw the last penny out of a man's pocket,
and bend everything on earth to its own despotic will. Give me
the
private ownership of all the land, and will I move the earth? No; but
I will do more. I will undertake to
make slaves of all the human
beings on the face of it. Not chattel slaves exactly, but slaves
nevertheless. What an idiot I would be to make chattel slaves of
them. I would have to find them salts and senna when they were sick,
and whip them to work when they were lazy.
No, it is not good enough. Under
the system I propose the fools
would imagine they were all free. I would get a maximum of results,
and have no responsibility whatever. They would cultivate the soil;
they would dive into the bowels of the earth for its hidden
treasures; they would build cities and construct railways and
telegraphs; their ships would navigate the ocean; they would work and
work, and invent and contrive; their warehouses would be full, their
markets glutted, and:
The beauty of the whole
concern would be
That everything they made would belong to me.
It would be this way, you see: As
I owned all the land, they would
of course, have to pay me rent. They could not reasonably expect me
to allow them the use of the land for nothing. I am not a hard man,
and in fixing the rent I would be very liberal with them. I would
allow them, in fact, to fix it themselves. What could be fairer? Here
is a piece of land, let us say, it might be a farm, it might be a
building site, or it might be something else - if there was only one
man who wanted it, of course he would not offer me much, but if the
land be really worth anything such a circumstance is not likely to
happen. On the contrary, there would be a number who would want it,
and they would go on bidding and bidding one against the other, in
order to get it. I should accept the highest offer - what could be
fairer? Every increase of population, extension of trade, every
advance in the arts and sciences would, as we all know, increase the
value of land, and the competition that would naturally arise would
continue to force rents upward, so much so, that in many cases the
tenants would have little or nothing left for themselves.... Read
the whole piece
John Dewey: Steps to Economic Recovery
Go to the work of Henry George himself and learn how many of the troubles
from which society still suffers, and suffers increasingly, are due to the
fact that a few have monopolized the land, and that in consequence they have
the power to dictate to others access to the land and to its products -- which
include waterpower, electricity, coal, iron and all minerals, as well as the
foods that sustain life -- and that they have the power to appropriate to their
private use the values that the industry, the civilized order, the very benefactions,
of others produce. This wrong is at the very basis of our present social and
economic chaos, and until it is righted, all steps toward economic recovery
may be temporarily helpful while in the long run useless. ... read
the whole speech
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. ... read the whole article
Dan Sullivan: Are you a Real
Libertarian, or a ROYAL Libertarian?
The English free-trader Cobden
remarked that "you who free the
land will do more for the people than we who have freed trade."
Indeed, how can anyone speak of free trade when the trader has to pay
tribute to some favored land-entitlement holder in order to do
business?
This imperfect policy
of non-intervention, or
laissez-faire, led straight to a most hideous and dreadful economic
exploitation; starvation wages, slum dwelling, killing hours,
pauperism, coffin-ships, child-labour -- nothing like it had ever been
seen in modern times...People began to say, if this is what State
abstention comes to, let us have some State intervention.
But the state had intervened; that
was
the whole trouble. The State had established one monopoly--the
landlord's monopoly of economic rent--thereby shutting off great hordes
of people from free access to the only source of human subsistence, and
driving them into factories to work for whatever Mr. Gradgrind and Mr.
Bottles chose to give them. The land of England, while by no means
nearly all actually occupied, was all legally
occupied; and this State-created monopoly enabled landlords to satisfy
their needs and desires with little exertion or none, but it also
removed the land from competition with industry in the labor market,
thus creating a huge, constant and exigent labour-surplus. [Emphasis
Nock's] --Albert J. Nock, "The Gods' Lookout" February 1934 ...
Classical liberals recognized
that exclusive access to land, and
especially to more land than one was using, was a privilege that
should be paid for, thereby eliminating the need for taxes. It is not
a fee for using land, but a fee for the state privilege of denying
use of that land to everyone else.
Men did not make the
earth.... It is the value of the
improvement only, and not the earth itself, that is individual
property.... Every proprietor owes to the community a ground rent for
the land which he holds. --Tom Paine, "Agrarian
Justice," paragraphs 11 to 15
Another means of silently lessening the inequality of
[landed]
property is to exempt all from taxation below a certain point, and to
tax the higher portions or property in geometrical progression as they
rise. --Thomas Jefferson
Today's land value tax advocates
consider graduated land value tax
to be unnecessary and problematic, leading to artificial subdivision
(and phony subdivision) of land. The point is that Jefferson, to whom
libertarians pay homage, considered land monopoly a great evil and
land value tax a remedy, as did many other classical liberals:
Ground rents are a
species of revenue which the owner,
in many cases, enjoys without any care or attention of his own. Ground
rents are, therefore, perhaps a species of revenue which can best bear
to have a peculiar tax imposed upon them. --Adam Smith
Landlords grow richer in their sleep, without working,
risking,
or economizing. The increase in the value of land, arising as it does
from the efforts of an entire community, should belong to the community
and not to the individual who might hold title. --John Stuart Mill ... Read
the whole piece
Louis Post: Outlines of Louis F. Post's
Lectures, with Illustrative Notes and Charts (1894)
Note 88: "Rent is the effect of a monopoly; though the monopoly
is a natural one, which may be regulated, which may even be held as a trust
for the
community generally, but which cannot be prevented from existing. . . If
all the land of the country belonged to one person he could fix the rent
at his pleasure. . . The effect would be much the same if the land belonged
to so few people that they could and did act together as one man and the
rent by agreement among themselves . . . The only remaining supposition
is that of free competition. — Mill's Prin., book ii, ch. xvi, sec.
I.
Rent "considered as the price paid for the use of the land is naturally
a monopoly price." — Smith's Wealth of Nations, book o, ch.
xi.
Note 89: The line of separation between the poorest land thus commanding
a premium, and the best land for which labor will not pay a premium, was
formerly called "the margin of cultivation," probably because
the law of rent was not understood with reference to any but agricultural
land; but it is now more generally called "the margin of production," since
it is understood that the law of rent applies to all kinds of land, including,
of course, the building lots of cities.
The premium for land falls not into the fund termed Wages, but into the
fund termed Rent. Henceforth Wages consist not of the entire product of
labor, but of so much of that product as might with the same expenditure
of labor force be produced from the best land that commands no premium.
The remainder goes to the owners of the land from which it is in fact produced,
in proportion to the advantages which their land respectively contributes
to its production. This excess is the premium. It is what constitutes Rent
as distinguished from Wages. And both the amount of the general fund Rent,
and the amount of rent which each land-owner obtains, are determined by
the competition of labor for superior opportunities.
Thus, in the beginnings all Wealth would be Wages; but as labor was forced
from better to poorer lands, or, what is the same thing in its principle
of operation, as greater capabilities attached to particular lands in consequence
of social development, good government, industrial improvement, etc. Rent
would arise, and as a proportion of the gross Wealth-product, would increase
as labor was forced to poorer land or new capabilities were added to land
by society. The law derived from these phenomena is known as Ricardo's
law of rent. Henry George formulates it as follows:
"The rent of land is determined by the excess of its produce over
that which the same application can secure from the least productive land
in use." — Progress and Poverty, book iii, ch. ii.
As will be noticed, the law is the law of Wages as well as the law of
Rent. For whatever determines the proportion of Wealth to be taken as Rent
necessarily determines the proportion to be left as Wages. ...
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.
d. Effect of Confiscating Rent to Private Use.
By giving Rent to individuals society ignores this most just law, 99 thereby
creating social disorder and inviting social disease. Upon society alone,
therefore, and not upon divine Providence which has provided bountifully,
nor upon the disinherited poor, rests the responsibility for poverty and
fear of poverty.
99. "Whatever dispute arouses the passions of men,
the conflict is sure to rage, not so much as to the question 'Is it
wise?' as to the question 'Is it right?'
"This tendency of popular discussions to take an
ethical form has a cause. It springs from a law of the human mind;
it rests upon a vague and instinctive recognition of what is probably
the deepest truth we can grasp. That alone is wise which is just; that
alone is enduring which is right. In the narrow scale of individual
actions and individual life this truth may be often obscured, but in
the wider field of national life it everywhere stands out.
"I bow to this arbitrament, and accept this test." — Progress
and Poverty, book vii, ch. i.
The reader who has been deceived into believing that
Mr. George's proposition is in any respect unjust, will find profit
in a perusal of the entire chapter from which the foregoing extract
is taken.
Let us try to trace the connection by means of a chart, beginning with
the white spaces on page 68. As before, the first-comers take possession
of the best land. But instead of leaving for others what they do not themselves
need for use, as in the previous illustrations, they appropriate the whole
space, using only part, but claiming ownership of the rest. We may distinguish
the used part with red color, and that which is appropriated without use
with blue. Thus: [chart]
But what motive is there for appropriating more of the space than is used?
Simply that the appropriators may secure the pecuniary benefit of future
social growth. What will enable them to secure that? Our system of confiscating
Rent from the community that earns it, and giving it to land-owners who,
as such, earn nothing.100
100. It is reported from Iowa that a few years ago a
workman in that State saw a meteorite fall, and. securing possession
of it after much digging, he was offered $105 by a college for his "find." But
the owner of the land on which the meteorite fell claimed the money,
and the two went to law about it. After an appeal to the highest court
of the State, it was finally decided that neither by right of discovery,
nor by right of labor, could the workman have the money, because the
title to the meteorite was in the man who owned the land upon which
it fell.
Observe the effect now upon Rent and Wages. When other men come, instead
of finding half of the best land still common and free, as in the corresponding
chart on page 68, they find all of it owned, and are obliged either to
go upon poorer land or to buy or rent from owners of the best. How much
will they pay for the best? Not more than 1, if they want it for use and
not to hold for a higher price in the future, for that represents the full
difference between its productiveness and the productiveness of the next
best. But if the first-comers, reasoning that the next best land will soon
be scarce and theirs will then rise in value, refuse to sell or to rent
at that valuation, the newcomers must resort to land of the second grade,
though the best be as yet only partly used. Consequently land of the first
grade commands Rent before it otherwise would.
As the sellers' price, under these circumstances, is arbitrary it cannot
be stated in the chart; but the buyers' price is limited by the superiority
of the best land over that which can be had for nothing, and the chart
may be made to show it: [chart]
And now, owing to the success of the appropriators of the best land in
securing more than their fellows for the same expenditure of labor force,
a rush is made for unappropriated land. It is not to use it that it is
wanted, but to enable its appropriators to put Rent into their own pockets
as soon as growing demand for land makes it valuable.101 We may, for illustration,
suppose that all the remainder of the second space and the whole of the
third are thus appropriated, and note the effect: [chart]
At this point Rent does not increase nor Wages fall, because there is
no increased demand for land for use. The holding of inferior land for
higher prices, when demand for use is at a standstill, is like owning lots
in the moon — entertaining, perhaps, but not profitable. But let
more land be needed for use, and matters promptly assume a different appearance.
The new labor must either go to the space that yields but 1, or buy or
rent from owners of better grades, or hire out. The effect would be the
same in any case. Nobody for the given expenditure of labor force would
get more than 1; the surplus of products would go to landowners as Rent,
either directly in rent payments, or indirectly through lower Wages. Thus:
[chart]
101. The text speaks of Rent only as a periodical or
continuous payment — what would be called "ground rent." But
actual or potential Rent may always be, and frequently is, capitalized
for the purpose of selling the right to enjoy it, and it is to selling
value that we usually refer when dealing in land.
Land which has the power of yielding Rent to its owner
will have a selling value, whether it be used or not, and whether Rent
is actually derived from it or not. This selling value will be the
capitalization of its present or prospective power of producing Rent.
In fact, much the larger proportion of laud that has a selling value
is wholly or partly unused, producing no Rent at all, or less than
it would if fully used. This condition is expressed in the chart by
the blue color.
"The capitalized value of land is the actuarial
'discounted' value of all the net incomes which it is likely to afford,
allowance being made on the one hand for all incidental expenses, including
those of collecting the rents, and on the other for its mineral wealth,
its capabilities of development for any kind of business, and its advantages,
material, social, and aesthetic, for the purposes of residence." — Marshall's
Prin., book vi, ch. ix, sec. 9.
"The value of land is commonly expressed as a certain
number of times the current money rental, or in other words, a certain
'number of years' purchase' of that rental; and other things being
equal, it will be the higher the more important these direct gratifications
are, as well as the greater the chance that they and the money income
afforded by the land will rise." — Id., note.
"Value . . . means not utility, not any quality
inhering in the thing itself, but a quality which gives to the possession
of a thing the power of obtaining other things, in return for it or
for its use. . . Value in this sense — the usual sense — is
purely relative. It exists from and is measured by the power of obtaining
things for things by exchanging them. . . Utility is necessary to value,
for nothing can be valuable unless it has the quality of gratifying
some physical or mental desire of man, though it be but a fancy or
whim. But utility of itself does not give value. . . If we ask ourselves
the reason of . . . variations in . . . value . . . we see that things
having some form of utility or desirability, are valuable or not valuable,
as they are hard or easy to get. And if we ask further, we may see
that with most of the things that have value this difficulty or ease
of getting them, which determines value, depends on the amount of labor
which must be expended in producing them ; i.e., bringing them into
the place, form and condition in which they are desired. . . Value
is simply an expression of the labor required for the production of
such a thing. But there are some things as to which this is not so
clear. Land is not produced by labor, yet land, irrespective of any
improvements that labor has made on it, often has value. . . Yet a
little examination will show that such facts are but exemplifications
of the general principle, just as the rise of a balloon and the fall
of a stone both exemplify the universal law of gravitation. . . The
value of everything produced by labor, from a pound of chalk or a paper
of pins to the elaborate structure and appurtenances of a first-class
ocean steamer, is resolvable on analysis into an equivalent of the
labor required to produce such a thing in form and place; while the
value of things not produced by labor, but nevertheless susceptible
of ownership, is in the same way resolvable into an equivalent of the
labor which the ownership of such a thing enables the owner to obtain
or save." — Perplexed Philosopher, ch. v.
The figure 1 in parenthesis, as an item of Rent, indicates potential Rent.
Labor would give that much for the privilege of using the space, but the
owners hold out for better terms; therefore neither Rent nor Wages is actually
produced, though but for this both might be.
In this chart, notwithstanding that but little space is used, indicated
with red, Wages are reduced to the same low point by the mere appropriation
of space, indicated with blue, that they would reach if all the space above
the poorest were fully used. It thereby appears that under a system which
confiscates Rent to private uses, the demand for land for speculative purposes
becomes so great that Wages fall to a minimum long before they would if
land were appropriated only for use.
In illustrating the effect of confiscating Rent to private use we have
as yet ignored the element of social growth. Let us now assume as before
(page 73), that social growth increases the productive power of the given
expenditure of labor force to 100 when applied to the best land, 50 when
applied to the next best, 10 to the next, 3 to the next, and 1 to the poorest.
Labor would not be benefited now, as it appeared to be when on page 73
we illustrated the appropriation of land for use only, although much less
land is actually used. The prizes which expectation of future social growth
dangles before men as the rewards of owning land, would raise demand so
as to make it more than ever difficult to get land. All of the fourth grade
would be taken up in expectation of future demand; and "surplus labor" would
be crowded out to the open space that originally yielded nothing, but which
in consequence of increased labor power now yields as much as the poorest
closed space originally yielded, namely, 1 to the given expenditure of
labor force.102 Wages would then be reduced to the present productiveness
of the open space. Thus: [chart]
102. The paradise to which the youth of our country
have so long been directed in the advice, "Go West, young man,
go West," is truthfully described in "Progress and Poverty," book
iv, ch. iv, as follows :
"The man who sets out from the eastern seaboard
in search of the margin of cultivation, where he may obtain land
without paying rent, must, like the man who swam the river to get
a drink, pass for long distances through half-titled farms, and traverse
vast areas of virgin soil, before he reaches the point where land
can be had free of rent — i.e., by homestead entry or preemption."
If we assume that 1 for the given expenditure of labor force is the least
that labor can take while exerting the same force, the downward movement
of Wages will be here held in equilibrium. They cannot fall below 1; but
neither can they rise above it, no matter how much productive power may
increase, so long as it pays to hold land for higher values. Some laborers
would continually be pushed back to land which increased productive power
would have brought up in productiveness from 0 to 1, and by perpetual competition
for work would so regulate the labor market that the given expenditure
of labor force, however much it produced, could nowhere secure more than
1 in Wages.103 And this tendency would persist until some labor was forced
upon land which, despite increase in productive power, would not yield
the accustomed living without increase of labor force. Competition for
work would then compel all laborers to increase their expenditure of labor
force, and to do it over and over again as progress went on and lower and
lower grades of land were monopolized, until human endurance could go no
further.104 Either that, or they would be obliged to adapt themselves to
a lower scale of living.105
103. Henry Fawcett, in his work on "Political Economy," book
ii, ch. iii, observes with reference to improvements in agricultural
implements which diminish the expense of cultivation, that they do
not increase the profits of the farmer or the wages of his laborers,
but that "the landlord will receive in addition to the rent already
paid to him, all that is saved in the expense of cultivation." This
is true not alone of improvements in agriculture, but also of improvements
in all other branches of industry.
104. "The cause which limits speculation in commodities,
the tendency of increasing price to draw forth additional supplies,
cannot limit the speculative advance in land values, as land is a fixed
quantity, which human agency can neither increase nor diminish; but
there is nevertheless a limit to the price of land, in the minimum
required by labor and capital as the condition of engaging in production.
If it were possible to continuously reduce wages until zero were reached,
it would be possible to continuously increase rent until it swallowed
up the whole produce. But as wages cannot be permanently reduced below
the point at which laborers will consent to work and reproduce, nor
interest below the point at which capital will be devoted to production,
there is a limit which restrains the speculative advance of rent. Hence,
speculation cannot have the same scope to advance rent in countries
where wages and interest are already near the minimum, as in countries
where they are considerably above it. Yet that there is in all progressive
countries a constant tendency in the speculative advance of rent to
overpass |