b. PROGRAMS OF INDUSTRIAL REFORM

CHAPTER XI

SINGLE TAX

61. The persistence of poverty in modern life 1

1

tax defined,

By single tax is meant a policy under which all public revenue is The single to be raised by a single tax on land value. Land value is defined as the value of the land itself, irrespective of all improvements. This means that land value includes only two elements: location value and fertility value. The basic idea of the single tax is an old one, but the modern single tax movement owes its origin to the activities of an American reformer, Henry George. In 1879 George published Henry George. a remarkable book, Progress and Poverty, in which he expounded his doctrine. In the following extract from Progress and Poverty, George points out that in spite of the progress of the world, poverty persists: In every direction, the direct tendency of advancing civilization The prois to increase the power of human labor to satisfy human desires · extirpate poverty, and to banish want and the fear of want. The growth of population, the increase and extension of exchanges, increased, the discoveries of science, the march of invention, the spread of . education, the improvement of government, and the amelioration of manners, considered as material forces, have all a direct tendency to increase the productive power of labor not of some labor, but of all labor; not in some departments of industry, but in all departments. . . .

to

ductive

power

of

labor has

steadily

do not

increase

But labor cannot reap the benefits which advancing civilization but wages thus brings, because they are intercepted. Land being necessary to labor, and being reduced to private ownership, every increase in the productive power of labor but increases rent - the price that labor must pay for the opportunity to utilize its powers; and thus all the advantages gained by the march of progress go to the owners

1 From Henry George, Progress and Poverty. Appleton & Co., New York, 1879. Book v, Chapter II.

because labor is deprived of its fruits.

This condition universal.

George

rejects a

number of proposed

remedies for poverty,

and proposes the "true remedy,"

of land, and wages do not increase. Wages cannot increase; for the greater the earnings of labor the greater the price that labor must pay out of its earnings for the opportunity to make any earnings at all.

...

And thus robbed of all the benefits of the increase in productive power, labor is exposed to certain effects of advancing civilization, which, without the advantages that naturally accompany them, are positive evils, and of themselves tend to reduce the free laborer to the helpless and degraded condition of the slave.

...

Look over the world to-day. In countries the most widely differing - under conditions the most diverse as to government, as to industries, as to tariffs, as to currency you will find distress among the working classes; but everywhere that you thus find distress and destitution in the midst of wealth you will find that the land is monopolized; that instead of being treated as the common property of the whole people, it is treated as the private property of individuals; that, for its use by labor, large revenues are extorted from the earnings of labor.

62. The remedy proposed by Henry George 1

After pointing out that poverty persists despite the progress of the world, George discusses six of the remedies for poverty which were advocated in his day. These are (1) greater economy in government; (2) the education of the working classes and dissemination of the principles of thrift; (3) the trade union movement; (4) "the coöperation of labor and capital"; (5) governmental regulation of industry; and (6) a more general distribution of land. After a short discussion of these so-called remedies for poverty, he concludes that all of them are either “inefficacious or impracticable.” He then announces as "the true remedy" for poverty the abolition of private property in land. He continues the discussion in the following language:

We have reached this conclusion by an examination in which every step has been proved and secured. In the chain of reasoning Appleton & Co. Book VI,

1 From Henry George, Progress and Poverty. Chapter II. Book VII, Chapter 1.

no link is wanting and no link is weak. Deduction and induction which conhave brought us to the same truth - that the unequal ownership sists in making land of land necessitates the unequal distribution of wealth. And as common in the nature of things unequal ownership of land is inseparable property. from the recognition of individual property in land, it necessarily follows that the only remedy for the unjust distribution of wealth

is in making land common property. . . .

The institution of private property [in land] cannot be defended on the score of justice. The equal right of all men 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 have a right to be in this world and others no right.

The institution of private prop erty in

land is

unjust.

advanced

If we are all here by the equal permission of the Creator, we are Arguments all here with an equal title to the enjoyment of His bounty - with an equal right to the use of all that Nature so impartially offers. This is a right which is natural and inalienable; it is a right which vests in every human being as he enters the world, and which during his continuance in the world can be limited only by the equal rights of others.

of this view.

There is on earth no power which can rightfully make a grant in support of exclusive ownership in land. If all existing men were to unite to grant away their equal rights, they could not grant away the right of those who follow them. For what are we but tenants for a day? Have we made the earth, that we should determine the rights of those who after us shall tenant it in their turn? The Almighty, who created the earth for man and man for the earth, has entailed it upon all the generations of the children of men by a decree written upon the constitution of all things a decree which no human action can bar and no prescription determine. Let the parchments be ever so many, or possession ever so long, natural justice can recognize no right in one man to the possession and enjoyment of land that is not equally the right of all his fellows.

The recognition of individual proprietorship of land is the denial Basic cause of of the natural rights of other individuals it is a wrong which must the unequal show itself in the inequitable division of wealth. For as labor cannot distribution produce without the use of land, the denial of the equal right to the of wealth.

Nature of the single tax, as proposed by George.

The single tax would encourage production,

render possible a more equal distribution of wealth,

use of land is necessarily the denial of the right of labor to its own produce. . . . To this fundamental wrong we have traced the unjust distribution of wealth which is separating modern society into the very rich and the very poor. . .

63. Results claimed for the single tax1

After advancing arguments to substantiate his claim that the private ownership of land is unjust, George next considers the best means of applying his "remedy." His proposal is to allow individuals to retain possession of "their" land, but to confiscate land value by taxation. He further proposes to abolish all other taxes, thus making the tax on land value a single tax. This single tax is to take all land value for the benefit of the community, and is to be the source of all public revenue. George advanced the following claims for the single tax:

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. All would be free to make or to save, to buy or to sell, unfined by taxes, unannoyed by the tax-gatherer. 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."

...

[The single tax would also have a desirable effect upon the distribution of wealth.] . . . 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

From Henry George, Progress and Poverty. Appleton & Co. Book IX, Chapters I, II, and IV. Book VIII, Chapter II.

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 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. . .

[The single tax would work great improvements in social organiza- improve tion and social life.] Noticeable among these is the great simplicity government, which would become possible in government. To collect taxes, to prevent and punish evasions, to check and counter-check revenues drawn from so many distinct sources, now make up probably three-fourths, perhaps seven-eighths of the business of government, outside of the preservation of order, the maintenance of the military arm, and the administration of justice. An immense and complicated network of governmental machinery would thus be dispensed with.

the adminis

tration of

civil and

criminal

law,

In the administration of justice there would be a like saving of facilitate strain. Much of the civil business of our courts arises from disputes as to ownership of land. These would cease when the state was virtually acknowledged as the sole owner of land, and all occupiers became practically rent-paying tenants. . . . The rise of wages, the opening of opportunities for all to make an easy and comfortable living, would at once lessen and would soon eliminate from society the thieves, swindlers, and other classes of criminals who spring from the unequal distribution of wealth. Thus the administration of the criminal law, with all its paraphernalia of policemen, detectives, prisons, and penitentiaries, would, like the administration of the civil law, cease to make such a drain upon the vital force and attention of society. We should get rid, not only of many judges, bailiffs, clerks and prison keepers, but of the great host of lawyers who are now maintained at the expense of producers; and talent now wasted in legal subtleties would be turned to higher pursuits.

All this simplification and abrogation of the present functions allow an of government would make possible the assumption of certain other extension of