.
| The
Professors and the Single Tax |
The contribution to the discussion of the single tax by Professor
Alvin S. Johnson of Cornell University in the Atlantic Monthly for
January, 1914, has stimulated general interest as to the attitude of
professional economists on this question. Scores are professors and
economists, including those who have attained first eminence, as well as
those growing to distinction, have long been magnanimously hospitable to
the discussion of the single tax. Granting the eccentricities or
aberrations of single taxers, such as the Spencerian contention that
private property is the land itself -- that is, for men to own land in
severalty -- is wrong, and the economic hallucination that it might be
administratively possible to take in taxation 100 percent or all of
economic rent, may it not still be a fair question to propound to the
professors whether they have attempted to separate the essential
substance of the single-tax proposal from the excrescences that have
accumulated about it and to consider the main issues solely on its
merits? Have they not rather shown a tendency to emphasize and magnify
the irrelevant and inconsequential contentions of misguided advocates of
the single tax, to the neglect of its central thesis?
The first question is, of course, as to the real importance of the
single-tax theory. If that importance is sufficient, should not the
subject find place in the laboratory of the professor, where, by patient
and careful analysis, qualitative and quantitative, dross is separated
from gold? Has the single tax received at his hands discriminating
examination and elucidation? Can it be claimed that the professors as a
class have so studied as to reach an accepted scientific analysis and
understanding? A careful examination of the discussions of the single
tax in the formal treatises on political economy certainly fails to
indicate any exhaustive research or to discover any considerable body of
helpful, constructive criticism. Instead of recognizing the basic
principle of the single tax, which is admitted even by the severest
critics to be sound, and then developing this fruitful idea by a
eliminating error from its presentation and determining the limits of
its economical application, the economists have seemingly bent their
energies toward the annihilation of the whole doctrine. They have
elected to play the easy role of hostile critic, instead of essaying of
the more difficult one to guide, philosopher, and friend. It is,
however, pleasant to record that to this general statement there are
many notable specific exceptions.
A MISREPRESENTATION OF THE ISSUE
Professor Johnson prefaces his discussion with the following
astonishing thesis:
The single-tax movement would, therefore, be aptly
designated as a propaganda for the universal confiscation of land. And
this designation the single taxers themselves would accept without
reservation, .... as a step in the direction of the confiscation of
all private property.
This gratuitous assertion of Professor Johnson may be offset by the
following declarations of the two authorities on the single tax most
widely recognized, Henry George and Thomas G. Shearman. In 1892 George
declared:[1]
I am not even a land nationalizationist, as the
English and German and Australian land nationalists well know. I have
never advocated the taking of land by the State or the holding of land
by the State, further than needed for public use; still less the
working of land by the state.
Shearman declared also in 1892:[2]
Shall we undertake to reclaim literal possession of "the
land for the people?" Rightly or wrongly, the moral sense of the
people would revolt at such a proposition. And if it did not, yet the
immense complications involved in awarding compensation for
improvements would break down the whole project. It is not worthwhile
to inquire into the abstract morality of an utterly impracticable
scheme.
I have never before encountered Professor Johnson's conception of the
doctrine of the single tax from one having any pretense to knowledge of
the subject. Such an introduction to the discussion is strongly
suggestive of the farmer who put green goggles on his horse and fed him
on shavings. "Confiscation" is penalty for crime, and the use
of this term in connection with the single tax involves gross distortion
and exaggeration. The sovereign State may appropriate private property
of its citizens in two ways: (1) by confiscation, (2) by taxation. When
one particular man, by treason or otherwise has forfeited his rights as
a citizen, the lands and houses and personalty of this one man may all
be "forfeit to the crown," while the validity and sanctity of
9,999 other men's rights are in no way infringed. This is confiscation.
On the other hand, when the state, in order to obtain the revenue to
meet the expenses of government, levies tribute up on its 10,000
citizens impartially, this is taxation. Those who make this charge of
confiscation forget that land investment today is practically free of
tax, and that the burden is upon them to show how in justice this
anomalous exemption should continue.
A CORRECT PRESENTATION OF THE ISSUE
Why did not Professor Johnson find space to say that the single tax
seeks to embody the principle of the application of common property to
common uses, "the taking by community for the use of the community
of that value which is the creation of the community" -- the
justice of which will, I ventured to say, be acknowledged by nine out of
ten of the economists of the world? Why did he not say that the single
taxer hangs his hope upon the fact that, however heavy the tax upon
land, it can be no burden upon the worker, and cannot affect the use
value of land -- that an "old" tax, i.e., a tax which was upon
the land when it passed to the present owner, is not now are burden upon
him -- that only a future "new" tax would be a net deduction
from the rent of his land -- that a landowner per se is not a "parasite"
except to the extent that he fails in his landlord-duty to improve his
land -- to the extent only that he stands between man and the land, and
becomes a speculator, a cornerer a necessary life?
SPOLIATION OF THE MIDDLE-CLASS
Again, Professor Johnson represents the single tax as "essentially
a device for the spoliation of the middle-class." When a man buys
land in Regina for $5,000 and sells it ten years later for $200,000, who
is it, will Professor Johnson tell us, that is saddled with the
maintenance of this $195,000 of "water" if not the great
middle class of Regina, the class whose improvements, of all others the
world over, generally exceed the site value of their land, and to whom,
therefore, the remission of taxes on their improvements would be
tantamount to compensation rather than confiscation, since their tax
burden would be proportionately less. Or, began, to pile Pelion upon
Ossa, if the land values of the city of Seattle, Washington, which in
1901 were $71 million are ten years later in 1911 $281 million, who is
to pay the taxes eventually necessary to maintain this added $211
million speculative value, if it is not the middle-class -- the
occupiers, users, and improvers of the land of Seattle? One advantage of
the single tax to the "middle-class man," if he is a would-be
farmer, is that so far as an increased tax on the land decreases its
selling price he will require less ready capital for the purchase of a
farm. It will not, however, alter the annual cost to him for its use;
this will always be the sum of the interest on his investment plus his
land tax. If his purchase price is lower, his tax will be higher, and
vice versa. Professor Johnson has overlooked the fact that one-third of
the farmers are tenants and will look to their landlords to pay the land
tax. As to the two-thirds who are owners and cultivators, the general
remedy will apply that, however adverse the effect upon any particular
class of landowners, their alleged injury cannot obtain beyond two or
three generations, at farthest. They can meantime have no ground of
complaint beyond having their investment, now free of tax, subjected to
the same rate as buildings that are upon the land.
SOURCE OF PRESENT COLOSSAL INDUSTRIALISM
According to Professor Johnson, "it was the unearned increment
which opened the West and laid the basis for our present colossal
industrialism,.... Has moved hundreds of thousands from our Middle-West
to the Canadian Northwest." It was, he declares, the unearned
increment, rather than a hunger and wanderlust of millions, that created
a vast surplus of food products. It is the general impression that the
hunger of the millions develop their food supply along the line of least
resistance. Is it not free land that for 100 years has promoted the
westward tide? Now that this land is no longer free for use, but
monopolized out of use, the "Westward Ho!" man has no one to
defend him from the speculator in the increment who wants to sell him
his land at a "watered" price. So he falls in with the current
to Canada, where a government shows interest enough to help pay his
traveling expenses from some distant country, gives him temporary free
support, helps him to settle, and lends him credit with which to start.
The single tax would offer and additional inducement in the fact that
the best lands would be opened to him at the lowest instead of the
highest price. It may well be asked, Who gets the principle benefit of
this Northwest movement? Is it the "hundreds of thousands"
moving away from the "Middle West?" Is at the depopulated
district, or is it the land speculator who intercepts a very
considerable portion of this benefit to settler by anticipating and
appropriating the land increment. Of this increment it may be said that
is "water" in precisely the same sense in which $500 million
of steel stock is water. It is the capitalization of the heaviest
tribute that the steel traffic for land traffic will bear -- a dividend
without an investment.
It is delusive to say that in any true sense the speculators have
created these industries and values. They simply banked upon the general
recognition that people must have land as they must have grain, and they
cornered the land as grain is cornered, and thus profited at the expense
of the great middle-class, the workers of the world. Thus it is by no
means clear that the "unearned increment" has not been more of
a bain than a blessing in the development of this country. It is the
artificial prominence of the centrifugal spreading out influence, with
its unsystematic wasteful and prodigal treatment of the land, that has
made the United States a byword among the nations.
The Sage of Concord [Ralph Waldo Emerson] was wise when he said
of the rush to get rich: "The of one is the hope of thousands, and
the bribe acts like the neighborhood of a gold mine to impoverish the
farm, the school, the house, the church, and the very body and feature
of man."[3] What did these
words betoken if not a clear intellectual epitome of the whole land
question, pronounced nearly four-score years ago, before the hegira of
the forty-niners, and early in the great land movement to the West?
THE PROFESSORS ON PARADE
The foregoing easy disposal of the single tax by Professor Johnson
tempts one to turn attention to the treatment of the subject by standard
economic writers. The writings of eleven authorities -- Bullock,
Daniels, Davenport, Ely, Fetter, Fisher, Hadley, Plehn, Seager,
Seligman, and Taussig -- have been examined and excerpts made to exhibit
their views on the single tax. Thus an occasion is presented for the
single taxer to make his complaints and find what fault he can with
those who hold the keys to the kingdom of economics.
CONFISCATION, NATIONALIZATION, OWNERSHIP
In reading these treatises one cannot escape being impressed by the
near unanimity -- nine to two -- with which the writers confidently
dispose of the pretensions of the George plan by assuring themselves
that he aimed at the upsetting of a cherished institution, the
destruction of property rights, thus hopelessly prejudicing the case
even before a jury has been impaneled. This method of treatment is
vehemently protested as an unscientific mode of procedure. With a deadly
assumption of the intended abolition of "property in land"
there follows easy assent to the consequent charge of nationalization of
land on the high single tax road to Professor Johnson's "confiscation
of all private property." We believe it to be a well-grounded
complaint that the treatment of the "books" is sometimes
superficial, not always fair, and not always abreast of the times.
Professor Charles J. Bullock says:
The proposal to confiscate existing rents must be
rejected as unjust. (E. 328.) It is evidence that such a plan is
equivalent to national ownership, or nationalization of land. (I.
495.) .... Mr. George's plan of confiscating the value of land without
compensating present owners does not appeal to the conscience of the
average American as just. Society has allowed private land ownership
in this country ever since English settlement. The present owners have
invested in land in good faith. If it should be decided inexpedient to
continue our present system, the burden of the change should not be
thrown up on the single class of landowners. (I. 500.)
Professor Richard T. Ely says:
Mr. George proposes to take all the unearned
increment, past and present, and that whether the present owners have
been encouraged to believe that they might be permitted to appropriate
the whole unearned increment or not. Herein lies the essential
injustice of Mr. George's scheme..... (p. 596.). Mr. George not only
proposes to confiscate all economic rent without compensation, and to
abolish all other forms of taxation, but the assertion is made in
explanation and justification of the policy that it will abolish
poverty..... No abstract reasoning, based on "natural rights,"
will persuade a modern nation to so radical step (p.597.).
President Arthur T. Hadley says:
They propose either to make the land common property
and let this gain accrue to the public (land nationalization), or to
leave the title in private hands as at present, but tax economic rent
to its full amount in lieu of all other taxes, the single-tax theory
(pp. 470-471).
Professor Henry R. Seager says:
Such policies amount to confiscation and can only be justified on the
grounds of they are absolutely essential to general well-being (p.
522.)..... To deprive them of their lands, or what amounts to the same
thing, of the income which these lands afford, would be to commit a
monstrous piece of injustice (p.522.)..... A State which would thus
overturn an established institution, and confiscate by wholesale the
property of its citizens, would lose the confidence of those citizens
and be reduced to a condition of anarchy bordering on civil war (p.
523.)..... Such a tax involves the confiscation of property (p. 585).
Professor E. R. A. Seligman says:
When the change advocated is a direct reversal of the
progress of centuries, and reversion to primitive conditions away from
which all history has traveled, the necessity for its absolute proof
becomes far stronger. The nationalization of land is a demand which,
in order to win general acceptance, must be based on theories
independent of the doctrine of natural rights.
In their opposition to the single tax, the professors appear
substantially to assume that Henry George and the single tax are
synonymous and coterminous, and that when they have overthrown the "temple"
of their own interpretation of Henry George the single tax goes to ruin
with it. Such a course is hardly fair because of the fact that of the "old"
believers in Henry George a respectable minority do not at all follow
the professors in their interpretation. Mr. Thomas G. Shearman, who made
a scientific exposition of the single tax which no one claims to have
successfully attacked, has not even been involved as a commentator, and
a whole lot of didactic matter in extension of Henry George's formula --
matter that has received high academic endorsement as sound educational
material -- escapes the notice of should-be-careful economic guides.
These noted teachers should grasp the fact that they are, so to speak,
bellwethers of a great and perennial flock of citizens in the making,
even as Solomon of old doubtless had grasped the profound sociological
truth that when the king takes snuff all the people sneeze, a perception
which presumably accounted in no small degree for the temperance and
wisdom of his habits.
The professors have a right to believe, if they choose, that Henry
George thought the application of his remedy would result eventually in
the abolition of the institution of private property in land. On the
other hand, the fact that a body of original enthusiasts persistently
shout this proposition should not mislead the professors to mistake
noise for numbers, and thus implicate a vastly more numerous body of
logical and consistent believers in the single tax who stoutly defend
private proprietorship. Even though Henry George said "it is not
necessary to confiscate land, it is only necessary to confiscate rent,"
would not be a scientific procedure to correct such a false impression,
from whenever source, as that gradual taxation is criminal forfeiture,
confiscation -- a term that, wrested from its proper context, and in a
distorted sense, has been worked threadbare in a foreign service? A
worker in the Oregon field expresses full appreciation of the baleful
facts of this terror when he says that the particular parts of Henry
George's teachings which are construed to mean the destruction of the
institution of private property in land "were used with a terrific
effect" in the single-tax campaign of two years ago.
Whether or not Henry George meant to assert that the taking of any part
or all of ground rent in taxation would destroy individual ownership in
severalty of the of the land itself is yet a debatable question. In any
event, his assertion cannot make a right out of wrong. The party of the
other part wonders why the professors should be strenuous to profit by a
verbal inaccuracy of Henry George's instead of bringing the economic
question involved before the bar of their own enlightened judgment.
The edge of the professorial criticism is dulled by the fact that it is
so largely directed not to a scientific but to an unscientific statement
of the single tax. It is not even directed to the plane scientific form
in which George put it, but to a muddled by-interpretation, the
speciousness of which ought not to impose upon university men. The
provoking part of it is that in aid of a fairer definition of the
situation Mr. George himself was not called in to cut his own Gordian
knot. It was Mr. George's special achievement that, while distinctly
conceding the legal ownership, individual tender of or estate in the
land itself, he corrected and advanced the issue from the common right
to the use of the earth to the joint right to the enjoyment of rent,
making clear the fact that land is one thing and the rent of land
another and entirely difference thing, and that to take in taxation the
rent of land is not necessarily to take the land itself; yet we are
nonchalantly told by leading professors that, anyway, we are gaining
only an academic distinction.
The truth or error of the single tax is not depend upon the
infallibility of Henry George or even upon his elucidation of it. It is
difficult to see why professors should have been blind to the scientific
principle involved simply because they were not ready to follow Henry
George in all his conclusions. The science of taxation has been better
presented by another man who was just is devoted a philanthropist as
Henry George. The professors have had before them for 20 years the work
Thomas G. Shearman on Natural Taxation. It is curious that while Henry
George has been exposed to all manner of criticism, I have to meet an
attempted reputation of a single principle as expounded by Mr. Shearman,
or to meet the man who wanted to refute them.
The single taxer wonders how the academic treatments of his thesis can
be reckoned adequate when in seven out of eleven volumes of political
economy under consideration the name of Thomas G. Shearman is not
indexed, while the other four have half a dozen references, not one of
which citations or references deals with principles of the single tax.
It is well worth while the clear up this confusion as to common
property in land. Henry George presented for his remedy a perfect
formula; nevertheless, he continued ambiguously to reiterate the
recanted error of Spencer condemning specific ownership of land, but he
did this in such relation to his own record, and in such context, as to
justify the general opinion that his attack was aimed not at ownership
of land, but at ownership of rent. Thirdly, in this Spencerian phrase,
not only does he lack the support of any other known economist, but no
single-tax writer before or after him appears to have been impressed
with such a view. If progress of events and of the science of taxation
should ever cause the economists to expunge from their records this ex
parte verdict upon a mistaken and factitious issue, the case against
normal revenue methods would be greatly reduced in volume.
TAXATION OF FUTURE INCREMENT
The proposal to take in taxation a substantial part of the future
increment of land value, to which ready and wide assent has been given,
is discussed by only two of the eleven writers under scrutiny.
Professor Taussig says:[4]
A different proposal is that to appropriate, not the
whole of the unearned increment, but the future accretions.... Take
for society at-large the increase of rents that will arise hereafter.
There can be no objections in principle of this proposal.... The
question is different as regards the rise in rent that is still to
come. There is no vested right in the indefinite future.... With the
rapid growth of modern cities any unmistakable swelling of site rents,
a reservation of the community's rights with respect to urban land has
met with steadily increasing recognition.
The form in which this right is most likely to be asserted is that of
a special tax on the newly accruing increasing site values. In strict
theory, the whole of this increase might be taken through taxation.
Professor Bullock says:
If the proposal to confiscate existing rents must the
rejected as unjust, the same criticism cannot be directed at projects
for gradually appropriating to public purposes the future increment of
land values. (E. 328.).... To adjust municipal taxation in such a
manner as to intercept a considerable part of the future unearned
increment from land would be a safe and probably a desirable policy.
.... It would, moreover, be in line with some of the existing
tendencies in municipal finance. (E. 329.).... But any income acquired
by paying its capitalized value is not to be considered unearned. (E.
291.).... So far as urban lands are concerned, there can be little
doubt that it is the part of wisdom for municipalities to seize upon a
source of revenue that is brought into existence by urban growth and
to a large extent maintained by constant public expenditure. (E. 330.)
.... We must admit that a large unearned increment of ground rents
secured by the owners of specially favored lots. No one would question
the justice of imposing a part of the burden of taxation upon such an
income. (I. 499.)
At this point a generous critic finds himself confronted by a painful
sense of disproportion between topic and treatments. Taxation of the
future increment is a recent development in legislation, though it is
not new to discussion. It seems adapted to circumvent many or most of
the objections raised against the additional taxation of present rent,
and for that reason it appears to command a recognition peculiar to
itself. It seems to promise in some cases the possibility of a common
ground for initial proceedings, yet only two out of our eleven writers
give material attention to this proposition, which has received a
certain recognition in both Great Britain The foregoing declaration and
the following statement of Rev. Edward McGlynn, declared by due
authority in 1892 to contain nothing contrary to Catholic teaching, make
a liberal contribution to the economic solution: "To permit any
portion of this public property to go into private pockets, without a
perfect equivalent being paid into the public treasury, would be an
injustice to the community. Therefore the whole rental fund should be
appropriated to common or public uses." and Germany, and these two
writers compress the treatments into extremely small compass. One is
tempted to ask of the professors bluntly: "Are you really the
leaders, the pioneers, the inventors, the Edisons, and the Marconis of
the world's economic thought?" If the taxation of rent is sound in
principle, why should it receive such scant attention from our chosen
authorities?
MONOPOLY AND PRIVILEGE
Perhaps no single term has insinuated itself more into the popular
apprehension during the last decade than the term privilege. The press,
legislators, statesmen, and presidential candidates have expounded and
exploited it copiously. Following this initiative, single taxers have
taken great pains to formulate and define "privilege" and to
put its destructive features in a scientific setting. Naturally the
absence even of the term "privilege" in the indexes to the
economic books under consideration occasions momentary surprise.
Privilege is believed to offer great advantage as a vehicle for
economic teaching and discussion, as perhaps more inclusive though less
specific than monopoly, the established standard term.
THE THREE POSTULATES OF THE SINGLE TAX
It may not seem a gracious act in us to file claims against the college
and university commissaries for an inadvertent short measure here and
there in dealing out their rich stores of learning, but it has to be
performed. Here is the one closing specification. In single-tax
propaganda much time has been given to explaining the triple alliance of
three principles: (1) the social origin of ground rent; (2) the
non-shiftability, land tax; (3) the ultimate burdenlessness of a land
tax.
The second and third of these have received from the authorities full
description and almost universal endorsement. But antecedent to these is
the first principle: what is it that gives rise to economic rents, the
value of land? On this point the question arises: is the teacher giving
to his pupils all there is to be had? In an enumeration of the causes of
ground rent, population is usually the one first named. But a passive
population gives little value to land; it is rather the activities
consequent upon the character of population that create the value. The
topic invites easy and profitable amplification.
The more one realizes to what a fatuous extent Henry George men are
themselves responsible for the perversion of the main contention of
their chief, the more unfortunate does it appear that unwise methods of
one kind and another should have been forced into the issue and retarded
the reforms substantially for a generation, thus lessening the
tremendous original impulse of Progress and Poverty. That
impulse was great enough under wise methods to have brought the world of
today to a full recognition that taxation has a rightful domicile in the
domain of science.
In conclusion, it is hoped that the facts which have been pointed out
will suffice to induce economists, to whom the people look for light and
leading, to re-examine the whole subject of the so-called single tax,
not in the light of any fore-conception such as might result from
certain obiter dicta of Henry George, but by independent investigation
based on authoritative definitions and presentation of single-tax
philosophy, such as is found for example in Shearman's Natural
Taxation. The results of such investigation conducted by trained and
unbiased economists, uninfluenced by the opinions or conflicting
statements of previous writers, would be of the highest service to all
who are interested in the present desperate need of the world, namely a
proper shaping of revenue methods, whether of town, city, state, or
nation.
This, then, is our earnest plea for a new trial with a change of venue,
with reasonable assurance of a fair verdict upon the single tax as known
to its friends.
It is a parade review of the "human" professors face-to-face,
allowing us the satisfaction of telling not only how much we think of
them, but what we don't think of them.
It is the disavowal of an aim at the wholesale conversion of the world
to a following of Henry George and his writings in toto.
It contains the needful reiteration of the fact that Herbert Spencer
was wrong when he said that "private ownership in land is not
permissible," but was right in taking back out of thirteen sections
of chapter IX of Social Statics the six only which related
solely to this point; and that Henry George was right when he said that
"the joint or common right of men is not to the land but to the
rent of land."
With apologies for these works, as it were, of supererogation, we rest
from our labors and pray for the fruition of a great hope.
FOOTNOTES:
[1] A Perplexed Philosopher, p. 70.
[2] Natural Taxation, p. 215.
[3] Ralph Waldo Emerson in address "Nature" at Waterville
College, Maine, August 11, 1841.
[4] Taussig, F.W., Principles of Economics, Vol. II, pp. 75 and
102.
[5] Rev. J. Kelleher, teacher of St. John's College, Waterford,
Ireland, priest of a church which lays no claim to specific economic
leaning, has almost stolen the march on his American brethren when he
says in the Irish Theological Quarterly, January, 1914, that "I
have already labored to show that the present landowners should not be
permitted to appropriate any of the natural increase in land values
beyond what is represented in the present market value of their
lands..... If the entire increase is due to the public, then surely
there ought to be no objection against taking a bare 10 per cent or 20
per cent of it. One-fifth or even one-tenth of a loaf is better than no
bread, ..... although the whole of the natural increase in land values
should belong properly to the public, and therefore to take 10 per cent
of it from the present landowners would be no injustice ....." Fr.
Kelleher is the author of an excellent book, Private Ownership, its
Basis and Equitable Condition, published by M.H. Gill & Son
Ltd., Dublin, Ireland.
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