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The Remedy

You mean there is a remedy for these problems? Poverty? Joblessness? Sprawl? Wealth concentration? Long commutes? Unaffordable housing?

Yes! Read on. Check out the themes in the sidebar.


Henry George: Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth... The Remedy

He addressed the book, "To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."

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. [footnote omitted]...

The value of land, as we have seen, is the price of monopoly. It is not the absolute, but the relative, capability of land that determines its value. No matter what may be its intrinsic qualities land that is no better than other land which may be had for the using can have no value. And the value of land always measures the difference between it and the best land that may be had for the using. Thus, the value of land expresses in exact and tangible form the right of the community in land held by an individual; and rent expresses the exact amount which the individual should pay to the community to satisfy the equal rights of all other members of the community.

Thus, if we concede to priority of possession the undisturbed use of land, taxing rent into the public treasury for the benefit of the community, we reconcile the fixity of tenure which is necessary for improvement with a full and complete recognition of the equal rights of all to the use of land.

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

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

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

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

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

... go to "Gems from George"

John Dewey: Steps to Economic Recovery

The one thing uppermost in the minds of everybody today is the appalling existence of want in the midst of plenty, of millions of unemployed in the midst of idle billions of hoarded money and unused credit, as well as factories and mills deteriorating for lack of use, of hunger while farmers are burning grain for fuel. ...

Henry George called attention to this situation over fifty years ago. The contradiction between increasing plenty, increase of potential security--and actual want and insecurity is stated in the title of his chief work, Progress and Poverty. That is what his book is about. It is a record of the fact that as the means and appliances of civilization increase, poverty and insecurity also increase. It is an exploration of why millionaires and tramps multiply together. It is a prediction of why this state of affairs will continue; it is a prediction of the plight in which the nation finds itself to-day. At the same time it is the explanation of why this condition is artificial, man-made, unnecessary, and how it can be remedied. So I suggest that as a beginning of the first steps to permanent recovery there be a nationwide revival of interest in the writings and teachings of Henry George and that there be such an enlightenment of public opinion that our representatives in legislatures and public places be compelled to adopt the changes he urged. ...

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. ...

Consequently instead of attempting a technical explanation of the moral and economic philosophy of Henry George, I want to urge my hearers to acquaint themselves with his own works, to study them and then to organize to see that his principle is carried into effect. What are the most evident sore spots of the present? The answer is clear. Unemployment; extreme inequality in the distribution of the national income; enormous fixed charges in the way of interest on debts; a crazy, cumbrous, inequitable tax system that puts the burden on the consumer, and the ultimate producer, and lets off the parasites, exploiters and the privileged, -- who ought to be relieved entirely of their gorged excess, -- very lightly, and indeed in many cases, as in that of the tariff, pays them a premium for imposing a burden on honest industry and on the means of production; a vicious and incompetent banking system, with billions of money, the hope for the future of millions of hard-working peoples, still locked up, while the depositors lose their homes and walk the streets in vain; the greater part of our population, in the nation of the earth most favored by nature, still living either in slums or in homes without the improvements indispensable to a healthy and civilized life.

You cannot study Henry George without learning how intimately each of these wrongs and evils is bound up with our land system. One of our great national weaknesses is speculation. Everybody recognizes that fact in the stock market orgy of our late boom days. Only a few realize the extent to which speculation in land is the source of many troubles of the farmer, the part it has played in loading banks and insurance companies with frozen assets and compelling the closing of thousands of banks, nor how the high rents, the unpayable mortgages and the slums of the cities are connected with speculation in land values. All authorities on public works hold that the most fruitful field for them is slum clearance and better housing. Yet only a few seem to realize that with our present situation this improvement will put a bonus in the pockets of landlords, and the land speculator will be the one to profit financially--for after all, buildings are built on land.

So with taxation. There are all sorts of tinkering going on, but the tinkers and patchers shut their eyes to the fact that the socially produced annual value of land -- not of improvements, but of ground-rent value -- is about five billion dollars, and that its appropriation by those who create it, the community, would at once relieve the tax burden and ultimately would solve the tax problem. Of late the federal government has concerned itself with the problems of home ownership, but again by methods of tinkering that may easily in the long run do more harm than good. The community's acquisition of its own creation, ground-rent value, would both reduce the price of land and entirely eliminate taxes on improvement, thus making ownership easier. And how anyone expects to solve the unemployment question by putting the sanction of both legality and high pecuniary reward upon the ability of the few to keep the many from equal access to land and to the raw material, without which labor is impossible, I do not see -- and no one else does. For the tinkerers assume that unemployment must continues, only with government assistance to those who are necessarily out of work. By all means let us help those that now need it, but for the future let us prevent the cause instead of merely mitigating the effects. ...

I do not claim that George's remedy is a panacea that will cure by itself all our ailments. But I do claim that we cannot get rid of our basic troubles without it. I would make exactly the same concession and same claim that Henry George himself made:

"I do not say that in the recognition of the equal and unalienable right of each human being to the natural elements from which life must be supported and wants satisfied, lies the solution of all social problems. I fully recognize that even after we do this, much will remain to do. We might recognize the equal right to land, and yet tyranny and spoilation be continued. But whatever else we do, as along as we fail to recognize the equal right to the elements of nature, nothing will avail to remedy that unnatural inequality in the distribution of wealth which is fraught with so much evil and danger. Reform as we may, until we make this fundamental reform, our material progress can but tend to differentiate our people into the monstrously rich and frightfully poor. Whatever be the increase of wealth, the masses will still be ground toward the point of bare subsistence — we must still have our great criminal classes, our paupers and our tramps, men and women driven to degradation and desperation from inability to make an honest living." ... read the whole speech

Lindy Davies: The Cat in New York

When I taught at the Henry George School in New York, our Director, George Collins, used to give a stirring graduation speech to students. He told them they would find that the gift of insight they'd been given, in studying Georgist political economy, was also a kind of curse: they would never look upon their city with the same eyes. The land question and its ramifications, the malignant absurdities of today's economic systems and the sheer obviousness of the remedy, would shout at them in every day's news.

I was reminded of that when I recently visited New York. ...

Economists note in this budget crunch, as in others the city has faced, a curious disconnect between the fiscal crisis and the overall economy. Tax receipts are way down and the budget outlook is indeed scary, even while the underlying economy actually lurches toward recovery. If it weren't for the large declines in the (admittedly, very important) financial and tourism sectors, the city's economy would not be performing badly at all. How unfortunate, then, that New York will see no other alternative than to choke off economic recovery by raising income and sales taxes while cutting back on public services. But what can they do? The tax base is declining.

Or is it? It turns out that land values in New York, while modestly down in some areas, have not taken anywhere near the beating that the Stock Market has, or the small business community, or public services. No, the real estate market in New York City remains, all in all, quite bullish. There are few bargains to be had. Residential rents, of course, having been held artificially low by rent stabilization, provide no relief even in a weak market.

So, no -- despite the dire warnings, New York City need not endure a fiscal crisis. Its tax base -- properly defined -- is robustly capable of providing for public needs, while actually bringing business into the city. They have just been taxing the wrong things, all along. Tourists, bulls and bears come and go, but New York City's land values -- like its citizens -- are quite resilient. ... Read the whole article

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

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

a synopsis of Robert V. Andelson and James M. Dawsey: From Wasteland to Promised land: Liberation Theology for a Post-Marxist World

Individuals, in their bare capacity as landowners, do nothing to produce land value. By withholding sites from use, whether for speculation or for other reasons, they may generate scarcity, artificially inflating rent, but this does not reflect any positive contribution to production on the part of landowners.

While land value is not the only type of unearned increment, unearned income resulting from such advantages as talent, genes or luck is not at the expense of others. Even Karl Marx admitted: "The monopoly of property in land is even the basis of the monopoly of capital." Marx could have -- but did not -- champion the abolition of land monopoly; instead he advocated its transfer from private into state hands. It was left to Henry George to expound how the universal principles of justice found in the Mosaic model could be applied to the modern age in all its economic aspects -- rural and urban, agricultural and industrial, technologically undeveloped or advanced.

What George advocated was to leave land titles in private hands but to appropriate land rent via the existing machinery of property taxation. "I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless....It is not necessary to confiscate land; it is only necessary to confiscate rent." No owner or tenant would be expropriated or evicted. No limit would be placed on the quantity of land one could hold, as long as the annual rent were paid.

Coordinately with the capture of rent as public revenue, taxes on products of human labor -- improvements, personal property, services, commodities, wages, etc. -- would be reduced and ultimately eliminated.

George considered his remedy no mere human contrivance. He saw the growth of land value and the easy means of equitably distributing it as an expression of benevolent supernatural design: "As civilization goes on... so do the common wants increase and so does the necessity for public revenue arise. And so in that value which attaches to land, not by reason of anything the individual does, but by reason of the growth of the community, is a provision intended -- we may safely say intended -- to meet that social want."

George's remedy goes a long way to stop current inequity and prevent future inequity. While past inequity, in the form of accumulations of capital based on previous land speculation and monopoly cannot be accurately redressed, these fortunes can be impelled to serve the needs of the public via investment in production, not by further investment in land speculation and monopoly.

Dependency theory, to the degree that it hits upon one of the causes of Third World poverty in exploitation by foreign investors, can find in George's land value tax the constructive practical approach it lacks. Neither erection of trade barriers nor legal restriction of foreign ownership is called for. As one Australian writer puts it:

(W)hen investors from one country buy property in other countries they are seeking site rent, which they hope to obtain directly from tenants, or indirectly by selling land in the future when the price or capital value has increased.... The site rent that is so attractive to overseas investors can be kept in the country quite easily - - by shifting taxation from labor onto land."

Because George asserted, "We must make land common property," he is sometimes erroneously regarded as an advocate of land nationalization. But, as we have seen, he was nothing of the sort. The expropriation of land makes it practically impossible to fairly compensate people for the improvements to land, which are their legitimate property. George's system renders to the community what is due to the community, without doing any violence to the wealth that has been fairly earned by productive workers.  Read the whole synopsis

Al Katzenberger: A Synopsis of Henry George's Progress and Poverty

The Remedy

The equal right of all men and women to the use of land is as clear as their equal right to breathe the air. It is a right proclaimed by the fact of their existence. For we cannot suppose that some men and women have a right to be in this world and others do not.

Any one human being who appropriates to himself or herself the individual right to the land of any community or country, could legally expel therefrom all the rest of its inhabitants. If you extend this right to the whole surface of the globe, where would non-landowning human beings have the right to live?

This supposition is occurring on a growing scale, realized in actual fact. The comparative handful of proprietors who own large surfaces of the U.S. are doing only what federal, state, and local laws give them full power to do (and what many of them have done already), excluding millions of American people from their natural birthright, the land. And such exclusions are as repugnant to natural right as the spectacle of the vast body of the American people being compelled to pay such enormous sums to the few landowners of their number for the privilege of being permitted to live upon and use the land which they, the landowners, so fondly call their own; which is endeared to them by memories so tender and so glorious, and for which they are held in duty bound, if need be, to spill their blood and lay down their lives.

Place one hundred men and women on an island from which there is no escape, and whether you make one the absolute owner of the other ninety-nine, or the absolute owner of the soil of the island, will make no difference either to the chosen one or to the other ninety-nine.

It was not nobility that gave land, but the possession of land that gave nobility.

What is being proposed here is a simple yet sovereign remedy, which will raise wages, increase earnings of capital and give remunerative employment to whomever wishes it. The proposal is to appropriate land rent for public revenue, rather than rob producers of their rightful earnings by punitive taxation.

Now, as the taking of rent, or land value, must be increased as we abolish other "taxes," we may put the proposition in practical form by proposing to abolish all taxation and derive all public revenue from a legitimate charge upon land location values.

"Taxation," which lessens the reward of the producer, necessarily lessens the incentive to production. Thus, taxation which diminishes the earnings of the laborer or the returns to the capitalist tends to make the one less industrious and intelligent, the other less disposed to save and invest. "Taxation" which falls upon the processes of production interposes an artificial obstacle to the creation of wealth.

If manufactures are taxed the effect is to lessen improvements; tax commerce and the effect is to prevent exchange; tax capital, and the effect is to drive it away. But the whole rental value of land may be taken as public revenue, and the only effect will be to stimulate industry, to open new opportunities to capital and to increase the production of wealth.

The charge on land location values may be assessed and collected with a definiteness that partakes of the immovable and inconcealable character of the location itself. Were all charges for public revenue placed upon location values, irrespective of improvements, generating public revenue would be so simple and clear, and public attention would be so directed to it, that valuation of the charge on any location could and would be made with the same certainty that a real estate agent can determine the price a seller can get for a lot.

The charge upon location values falls only upon those who receive from society a valuable benefit and falls on them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. When all location rent is taken via legitimate charges for value received for the needs of the community, no citizen will have an advantage over any other citizen save as is given by industry, skill, and intelligence; and each will obtain what he or she fairly earns. Then, and not until then, will labor get its full reward, and capital its natural return.

Effects of the Remedy

The advantage which will be gained by substituting for the many taxes by which the public revenues are now raised, a single just charge levied upon the value of locations, will appear more and more important the more it is considered. With the removal of all the burdens which now oppress industry and hamper exchange, production of wealth would increase with a rapidity now undreamed of.

Consider the effect upon the production of wealth. Abolishing all taxation which now hampers every wheel of exchange and presses upon every form of industry, would be like removing an immense weight from a powerful spring. The present method of taxation operates to penalize energy and industry and skill and thrift like a fine upon those qualities. If a person builds a ship we make the person pay for such temerity, as though an injury had been done to the state; if a railroad is opened, down comes the tax collector upon it, as though it were a public nuisance; if a manufactory is erected we levy upon it an annual sum which would go far toward making handsome profit. We say we want capital, but if any one accumulates it or brings it among us, we penalize him or her for it as though we were giving the person a privilege. We punish with a tax those who cover barren fields with ripening grain; we fine those who put up machinery and clean up a dump.

To abolish these taxes would be to lift the whole enormous burden of penalties from productive industry.

To change the taxation from production to a charge on the value or rent of locations would give new stimulus to the production of wealth; it would also open new opportunities. For under this system no one would care to hold a location unless to use it, and locations now withheld from use would everywhere be thrown open to improvement. Millions of acres that today are being used inefficiently would return to their natural, pristine state.

The selling price of locations would fall; speculation in locations would receive its death blow; the monopolization of valuable locations would no longer pay.

And it must be remembered that this would apply not merely to agricultural land, but to all locations ... everywhere. Everywhere that locations had attained value, the generating of public revenue from those values, instead of operating, as now, as a fine upon improvement, would operate to motivate improvement. Whoever planted an orchard or sowed a field or built a house or built a manufactory, no matter how costly, would have no more to pay in location value charges than if such locations were kept vacant. The monopolist of agricultural locations would be charged as much as though those locations were covered with houses and barns, with crops and with stock. The owner of a vacant city lot would have to pay as high a charge for the privilege of keeping other people off of it until the owner wanted to use it as the neighbor who has a fine house upon his lot.

It would cost as much to keep a row of tumble-down shanties upon valuable locations as if those locations were covered with grand hotels or a pile of great warehouses filled with costly goods.

Consider the effect of such change upon the labor market. Competition would no longer be one-sided, as now. Instead of laborers competing with each other for employment, and in their competition cutting down wages to the point of bare subsistence, employers would everywhere be competing for laborers, and wages would rise to the fair earnings of labor. The employers of labor would not have merely to bid against other employers, all feeling the stimulus of greater trade and increased profits, but against the ability of laborers to become their own employers upon the natural opportunities freely opened to them by the location value charge which prevents the monopolization of locations.

It is manifest, of course that the change proposed here will greatly benefit all those who live by wages, whether of brain or of brawn. And it is likewise manifest that it will increase the incomes of those whose incomes are drawn from the earnings of capital, or from investments other than in locations.

Farmers, not those who never touch farm equipment, but the working farmers who are such a large class in the U.S., will benefit by the proposed change. Paradoxical as it may appear to these farmers until they understand the full bearings of the proposition, of all classes above that of the laborer such farmers have the most to gain by deriving all public revenue from just charges on location values. The fact is that taxation, as now levied, falls on them with peculiar punitive severity. They are taxed on all their improvements, houses, barns, fences, crops, and stock. Farmers pay personal income taxes and sales taxes. The personal property which they have cannot be as readily concealed or undervalued as can the more valuable kinds which are concentrated in the cities. They are not only taxed on personal property and improvements, which the owner of unused locations escapes, but their land is generally taxed at a higher rate than land held on speculation, simply because it is improved. But further than this all taxes imposed on commodities fall on the farmer without mitigation. The farmer would be a gainer by the substitution of a single charge upon the value of his or her location instead of all these taxes. The charge on location values would fall with greatest weight, not upon the agricultural districts, where location values are comparatively small, but upon the towns and cities where location values are high; whereas sales taxes and taxes upon personal income, personal property and improvements fall as heavily in the country as in the city. The result of a charge on location values would be that speculative values of locations would be kept down, and that cultivated and improved farms would have not payments to make to support government directly until the country around them had been well settled. In fact, paradoxical as it may at first seem to them, the effect of putting all charges for public revenue upon the value of locations would be to relieve the harder working farmers of all taxation.

Wealth would not only be enormously increased, it would be equitably distributed. Not to mean that each individual would get the same amount of wealth. That would not be equitable distribution, so long as different individuals have different powers and different desires. But wealth would be distributed by the degree in which the industry, skill, knowledge or prudence of each contributed to the common stock. The non producer would no longer roll in luxury while the producer got but the barest necessities of animal existence.

All fear of great fortunes might be dismissed, for when every person gets what each fairly earns, no one can get more than he or she fairly earns. How many men and women are there who can fairly earn a million dollars a year? read the whole synopsis

Frank Stilwell and Kirrily Jordan: The Political Economy of Land: Putting Henry George in His Place

Enthusiastic proponents of Henry George’s ideas have often presented them as a panacea for the economic, social and environmental problems that beset contemporary society. Indeed, the Georgist analysis does have much to offer. By more adequately addressing land as a unique economic, social and ecological resource, it can help to reveal underlying causes of currently pressing issues such as declining housing affordability, growing economic inequality, and environmental decay.

The Georgist land tax ‘remedy’ can also play an important role in the redress of these problems. However, there are limitations to the modern application of George’s ideas, as outlined in this article. While a uniform land tax is a necessary component in addressing contemporary political economic problems, it is not sufficient. It needs to be set in the context of a broader political economic analysis and policy program, also addressing public housing, urban and regional policies, environmental taxes and regulations, ‘floors and ceilings’ to limit income inequalities and macroeconomic stabilisation.

While the Georgist analysis redresses the general neglect of land in modern economic orthodoxy, it is important not to go too far to the other extreme. In other words, the important emphasis on land should not come at the expense of attention to problems associated with labour and capital and to the complex forms of government policy necessary for the balancing of contemporary economic, social and ecological concerns. The Georgist analysis needs to be integrated into a comprehensive political economic analysis of contemporary capitalism.

So what does ‘putting Henry George in his place’ entail? It means recognising the political economic importance of land and the potential social gains from the extension of land taxation. Equally, it means recognising the necessity of relating Georgist ideas and policy prescriptions to a broader canvas of modern political economy, including the analytical traditions associated with Karl Marx, J. M. Keynes, and J. K. Galbraith, and modern environmental economics. Henry George’s place is in good company. read the whole article

 

 



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