.
Can Georgism and Socialism Be
Reconciled? |
| [Reprinted from The
Square Deal, November, 1956] |
Many unthinking people speak or write as if Georgism, or "single
tax", were a variety of Socialism. This is about as logical as to
speak of Islamism as a variety of Protestantism, merely because it
differs from Roman Catholicism. Georgism and Socialism have something in
common, to be sure; but so have Islamism and Roman Catholicism as well
as Islamism and Protestantism. In all these cases there are fundamental
differences.
Georgists and Socialists are alike in realizing that the greatest
single evil afflicting the people on this planet is, the gross
maldistribution of wealth. In the poorest countries the wealthy waste
immense amounts of wealth on mere ostentation, which adds to the
happiness of nobody, and on indulgences which are not only useless but
harmful. In the richest countries millions of people lack the means of
keeping themselves in good health, and millions more lack the
commonplace comforts which raise human living conditions above those of
a healthy animal.. JJQ tiling can be more obvious than that a more
equable distribution or existing wealth would raise the standard of
human welfare, in devising methods of combating this evil, however,
Georgists and Socialists are irreconcilably at variance.
Georgists approach, the evil of maldistribution in fashion at once
scientific and practical. Knowing that superficial measures have never
cured any evil, and in countless cases have aggravated the very evils
they were meant to correct, they have studied and found .the causes of
maldistribution of wealth. Among these causes they found differences of
ability and industry to be of small consequence. In many localities it
seemed indeed to be the rule that the idle and extravagant are rich, the
industrious and thrifty poor. The chief effective cause was found to be
a system of privileges which enable a a limited, a self-perpetuating
class to exact from those who produce wealth a large, and in general
constantly increasing, part of the wealth produced without giving any
service in return. Of these privileges by far the most important is, the
privilege of excluding others from the land they must have if they are
even to live, still more to work. Other privileges are of minor
importance and are mainly dependent upon this chief privilege. This
privilege is particularly injurious, because it results not only in
depriving producers of much of the wealth they produce, but in
preventing much wealth from being produced at all. These effects are
aggravated by taxation, which in most countries is so levied as to take
a larger proportion of the smaller incomes, and which, being levied
mainly upon production, further limits the amount of wealth produced.
From recognizing the chief causes of maldistribution to planning
effective measures for its cure is but a short step. Most of the less
important privileges may easily be abolished - though not without some
resistance from the privileged ones. It is indeed impossible to abolish
the privilege of landholding without ruinously hindering production, and
it is impracticable to make individual holdings equal. It is simple,
however, to equalize privileges in landholding by requiring each
landholder to pay into the public treasury each year the difference
between the annual value of his holding and that of the poorest holding:
that is, the economic rent. The valuations required are much easier and
more exact than those on the basis of which existing, public revenues
are collected.
This principle hag nowhere been put into practical effect except to a
partial extent: not enough to lessen the incomes of the rich. The
incomes of the poor have been increased, but less than the increase in
production which resulted. The principle can be put into effect to a
degree which will come as near to abolishing incomes from privilege as
any governmental measures ever come to effecting their purpose.
Socialists are primarily not scientists or economists, but politicians.
They look upon the Georgists' study of causes as a waste of time. They
are leas anxious to know where they are going than to be on their way.
They want results quick enough and obvious enough to appeal to the
unthinking masses. If they attend at all to the matter of privilege, it
is only to spread privileges more widely. To this end they create fresh
privileges: public housing schemes, for example, give to a select class
the privilege of leasing houses or flats at a fraction of cost. To carry
out these schemes they must create an expensive bureaucracy. The
increased taxation necessary to carry out these schemes leaves the great
number of those altogether unprivileged in worse state than before,
socialists are not content with taking from the rich - they often impose
taxes which, like sales taxes, are paid by the poorest.
Georgists propose to simplify government. Socialists are suspicious of
simplicity; they want, grandiose schemes, which invariably are
expensive.
Georgists know that men differ so much in so many ways that the attempt
to make incomes, altogether equal is neither just nor economic. Men's
rights are equal, just as in geometry all right angles are equal; but in
everything except their rights, men differ. On this matter, Socialists
differ among themselves. Some, like G. B. Shaw, declare that equality of
income is of the essence of Socialism. Others say, like Marx: "From
each according to his ability; to each according to his need. But human
nature being what it is, nine hundred and ninety-nine men out of a
thousand honestly believe their own needs to be greater than those of
other people. Some authority must decide what each man's needs are --
and invariably those in authority find, as they did in Russia, that
their position of responsibility makes necessary incomes many times
greater than those of the common people.
Georgists are realists: they know that while men do at times use
unwisely wealth which they have themselves produced, in general the
producer is the best judge of how wealth should be used. The Socialist
is not a realist. He thinks that the producer should have, not what he
actually wants but what some bureaucrat thinks he wants. The Socialist's
naive belief that merely putting a stupid person in a position of
authority makes him capable of managing the citizen's affairs better
than the citizen himself can, would be funny if it were not such a
menace.
But while Georgists reject the principle of absolute equality of
income, the Georgist plan, carried out to its logical conclusion, must
result in incomes becoming more nearly equal than they can be under
Socialism. The great cause of inequality in income is, the appropriation
of the rent of land by a privileged few. Were land rent equally
distributed, or used for the general welfare, inequalities in income
could arise only from differences in ability and industry -- that is,
from differences in wages -- or from differing receipts from capital --
economic interest. Both interest and wages, however have for long been
constantly diminishing as a proportion of the total wealth produced. It
was shown in the article "Economic Concepts" (S. D. November
1955) that in a Georgist system interest would eventually fall to an
extremely small quantity, and might under certain conditions become
negative.
Wages are also diminishing as a proportion of the total product, and as
population increase must continue to fall. Under existing conditions, in
which rent is received by but a small part of the population, and in
which taxes take a considerable part of wages, wages must remain above
the minimum needed for subsistence. In Egypt wages are but a fifth of
the product, and are further reduced by taxes, the revenue from which is
used in ways which benefit principally the landlords; yet the people
exist, and are even slowly increasing. Were rent used for the general
welfare, however, population might increase to the point at which wages
were below the subsistence minimum; they might fall to the amount which
workers could wrest from the barren regions in the far north; yet the
people, sharing in an abundant rent fund, might be prosperous and happy.
Not only might public services "be increased, but pensions far in
excess of those promised by, the Social Credit orators might be paid out
of the rent, fund; just as at one time in certain German towns the
burghers not only paid no taxes but received free supplies of firewood.
Wages might fall so low as to provide insufficient incentive for
productive exertion. In that case it would be necessary to reverse the
present policy of penalizing production through taxes, and instead give
workers extra bonuses.
It is extremely improbable that population will ever increase to any
such extent. As Juan de Castro has shown in his Geography of Hunger,
the high birth rates in the poorest countries are the effect rather than
the cause of dire poverty, as if they were the result of a desperate
struggle for the survival of the race under almost impossible
conditions. Where people are prosperous, comfortable and happy and have
little fear of their children surviving to maturity, the instinct for
parenthood is satisfied by two or three children. If the time should
come where an increase in population is possible only at the cost of
seriously reduced living conditions, it is likely that two children per
couple will become the rule, with only enough' exceptions to make up for
the few, premature deaths and occasional sterile couples . But this
contingency is still a long way off. This planet can support far more
human beings than at present in greater comfort than is now enjoyed by
the average citizen in the most favored countries: seven or eight
billion, easily; ten or twelve, not quite so easily; fifteen or twenty,
perhaps. They would probably not be able to waste power tearing around
the country at preposterous speeds to no purpose, but they would have
abundance of more reasonable enjoyments. The more people, the greater
the chances for the development of transcendent geniuses who might lead
the race to undreamed of heights.
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