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In 1840 the Frenchman Pierre Joseph Proudhon wrote a book entitled What Is Property? In its opening sentence he answers his own question with the pronouncement "Property is theft." Most people would question so sweeping an indictment, still, many feel that somehow an element of injustice lurks in the processes by which property is distributed. Property, Proudhon says, is used to extract wealth and privilege through exclusive ownership. He expresses bitter opposition to property because he considers it the root of injustice. France was at that time mainly an agricultural country. When Proudhon speaks of property he is apparently thinking mainly of land. Elsewhere in the book he recognizes land as the source of all wealth. He holds that all inequalities in the circumstances of individuals arise because of the ownership of private property. Proudhon proposes a system of guaranteed rights to occupation of land subject to actual productive use of it. His system includes the right of the peasant to pass the land on to his heirs, provided they are in a position to carry on its cultivation. He felt that under such conditions the higgling of a really free market would secure to each person the equivalent of the value he produced. He held that land should not be held out of use by individuals for their own profit. In Prudhon's scheme of things the use of productivity of property would be a social return, and no longer a monopoly which makes theft Possible. Modern dictionaries present an imposing number of definitions of property. Most of them may be summarized in the phrase "things which may be owned." It is common use to include as property things as diverse as land, buildings, commodities, stocks, bonds, mortgages, water rights, royalties and other things. Confusion arises from the failure to recognize that these things are of different kinds. To avoid confusion a distinction must be made between the products of labor and the gifts of nature. Land as economists define it, includes all natural resources -- not only the surface of the ground, but minerals in the ground, water rights, the sea and the air, the fish in the sea, the birds that fly, all wild life and virgin forests. These things are gifts of nature. No individual produced them. They should not be recognized as the property of individuals. Land should no more be owned than the air or the ocean. Thomas Jefferson again and again pointed out that each generation of mankind has equal right to the earth and its resources. The current interest in ecology, the energy shortage, the discussions on environmental pollution and the waste of natural resources -- these are indications that we are beginning to realize our responsibility. Each generation of man is but a tenant here for a moment in time. This principle, that each generation has equal right to the earth and its resources, is the common denominator of our problems in ecology and in economics; it is of vital importance and should underlie all our institutions and legislation. The recently circulated "Human Manifesto" contains this statement, "The world belongs to the people who inhabit it." Does it? Our laws say the land belongs to the heirs and assigns of a small number of our ancestors, and in order to obtain access to the land we must come to terms with these heirs and assigns. But the land did not really belong to our ancestors. All land titles originate in force of fraud. Land titles in and around New York City stem from 17th century grant's by the King of England and the Duke of York. Land in Manhattan that little more than a century ago was farm land is now fabulously valuable. Its value is given, not by anything done by past or present title holders, but by the growth of the city. In order to use any part of this land the present generation must pay to the title holders an enormous rent, a rent that keeps increasing as the city grows. This system fails to recognize that each generation, including our own, has equal right to the earth. In our use of the word property, the distinction between land and wealth is to some extent recognized. Among things which may be owned we do not include the air or the ocean, or the fish in the sea. On the other hand, among things generally regarded as property are some things not made by man-such as land, minerals in the ground, water rights. Insofar as these can be said to belong to anybody, they should belong to all the people. They should be used for the benefit of the community as a whole. The failure to recognize this is the underlying cause why there is injustice in our system of distribution. We observe that the very large fortunes acquired by individuals almost all come from land -- the Rockefellers from oil, the Mellons from aluminum, the Guggenheims from copper, the Astors from New York City real estate. It is extremely difficult to become really rich unless one can somehow monopolize some land. of further technological advances, we have even more reason to ask why poverty persists. Henry George is an apostle of free enterprise. The trouble, he says, is that enterprise is not really free. He is opposed to monopolies. There are certain services which by their nature can most efficiently be performed by companies which have at least a local monopoly. To prevent abuses such companies are subject to regulation. Aside from such businesses it is difficult for anyone to obtain and maintain a monopoly position. But there is one form of monopoly which through the centuries has remained entrenched- the land monopoly. Winston Churchill was right in saying, "The land monopoly is not the only monopoly, but it is by far the greatest. It is a continuing monopoly." Henry George emphasizes the continuing nature of the land monopoly. It is bad enough, he says, to suffer an injustice which results from a single act of wrongdoing, but it is infinitely worse to permit an unjust practice to become and to remain a permanent part of our economic system. Because we have long submitted to it, must we continue to submit forever? Must our children and their descendents be saddled with it? In a detailed study of our economy and our institutions, George reaches the conclusion that the poverty that exists is due, not to the niggardlyness of nature, but to maladjustments in our economic system. He sees as the fundamental wrong the fact that certain individuals are allowed to monopolize the land. The injustice, he says, lies not in the private holding of land, but in the private expropriation of value created by the community. The remedy that he proposes is for the community to collect the full economic rent of all the land in lieu of all other taxes. Hence, the name Single Tax has been applied to his proposal. The reform that he proposes is a drastic reform. It will not be put into effect at once. But it must come, for justice requires it. It is not a panacea. There are other reforms that are needed. And when this reform is fully established there will still be problems. With any form of taxation there will be problems, but they certainly should be fewer with a Single Tax than with the multiplicity and complexity of the taxes we now have. And many of the reforms now attempted fail to achieve their purpose. Every reform is intended to in some way improve the community; if it does that, it increases the land value, the rent goes up, and thus the benefit of the reform accrues wholly to the landowners. So this reform must necessarily come before other reforms can become effective. It is probably too drastic a reform to be put into effect all at once. It has been suggested that it be spread over ten years by each year increasing the tax on the land value by ten percent until it absorbs the full economic rent, at the same time decreasing all other taxes by an equal amount. This would not disturb the tenure of anyone who is using the land; as the tax on land value went up, his other taxes would go down. If he were not using the land, the increased tax would be an incentive to put it to use, or to transfer it to someone who would. It would thus discourage speculation-the holding of land out of use in anticipation of future profits. The low taxes we now have on land values encourage speculation in land and the resultant urban sprawl. Such speculation would end if the full economic rent of land were collected in lieu of taxes. Whatever value a piece of land may have is given it, not by anything the owner has done, but by the growth of the community. Since the value is created by the community, that value is the natural source of the revenue needed to pay for community services. We do have, all over the United States, some tax on land values, but it does not come anywhere near collecting the economic rent. We also have taxes on buildings and other improvements; these taxes penalize the owner who does anything to improve the neighborhood and reward the one who lets his building deteriorate to become a slum. In addition we have income taxes on three levels, and we have sales taxes, excise taxes, tariffs and many hidden taxes of which we are hardly aware. All these taxes, other than those on land values, are taxes on production and tend to make things cost more. Taxes on land, value, however, tend to make the land cost less. When taxes are levied on real estate, in most places little or no attention is paid to the difference in nature between the land and the improvements. Improvements have value because of the labor that has gone into them; when new, this value bears a recognizable relationship to the cost of production. With the passage of time their value is reduced by depreciation. But land was not created by labor. The value of land is not reduced by depreciation. Often it is increased by the growth of population. This value belongs of right to the community, not to the individual. The private collection of the rent of land has had a tremendous impact on the distribution of wealth. A thorough study of this impact was made by Henry George. Like Proudhon, George was a printer before he became a writer. His first book, Progress and Poverty was first published in 1879. He starts by asking why poverty persists despite the advances in technology which brought great increases in production. Now, after nearly a century of further technological advances, we have even more reason to ask why poverty persists. Henry George is an apostle of free enterprise. The trouble, he says, is that enterprise is not really free. He is opposed to monopolies. There are certain services which by their nature can most efficiently be performed by companies which have at least a local monopoly. To prevent abuses such companies are subject to regulation. Aside from such businesses it is difficult for anyone to obtain and maintain a monopoly position. But there is one form of monopoly which through the centuries has remained entrenched -- the land monopoly. Winston Churchill was right in saying, "The land monopoly is not the only monopoly, but it is by far the greatest. It is a continuing monopoly." Henry George emphasizes the continuing nature of the land monopoly. It is bad enough, he says, to suffer an injustice which results from a single act of wrongdoing, but it is infinitely worse to permit an unjust practice to become and to remain a permanent part of our economic system. Because we have long submitted to it, must we continue to submit forever? Must our children and their descendents be saddled with it? In a detailed study of our economy and our institutions, George reaches the conclusion that the poverty that exists is due, not to the niggardlyness of nature, but to maladjustments in our economic system. He sees as the fundamental wrong the fact that certain individuals are allowed to monopolize the land. The injustice, he says, lies not in the private holding of land, but in the private expropriation of value created by the community. The remedy that he proposes is for the community to collect the full economic rent of all the land in lieu of all other taxes. Hence, the name Single Tax has been applied to his proposal. The reform that he proposes is a drastic reform. It will not be put into effect at once. But it must come, for justice requires it. It is not a panacea. There are other reforms that are needed. And when this reform is fully established there will still be problems. With any form of taxation there will be problems, but they certainly should be fewer with a Single Tax than with the multiplicity and complexity of the taxes we now have. And many of the reforms now attempted fail to achieve their purpose. Every reform is intended to in some way improve the community; if it does that, it increases the land value, the rent goes up, and thus the benefit of the reform accrues wholly to the landowners. So this reform must necessarily come before other reforms can become effective. It is probably too drastic a reform to be put into effect all at once. It has been suggested that it be spread over ten years by each year increasing the tax on the land value by ten percent until it absorbs the full economic rent, at the same time decreasing all other taxes by an equal amount. This would not disturb the tenure of anyone who is using the land; as the tax on land value went up, his other taxes would go down. If he were not using the land, the increased tax would be an incentive to put it to use, or to transfer it to someone who would. It would thus discourage speculation-the holding of land out of use in anticipation of future profits. The low taxes we now have on land values encourage speculation in land and the resultant urban sprawl. Such speculation would end if the full economic rent of land were collected in lieu of taxes. Ideally, the community, like the individual, should spend no more than it produces. Economists do not agree on how much the Single Tax would yield annually. Some think it would be enough to support our present governmental structure; others think it would not. That is really beside the question. Justice requires that the land rent be fully collected for governmental/services before any other tax is imposed. Since the economic rent of land is the natural source of revenue, the only just source of revenue for governmental bodies, it should be fully collected for governmental services before a single penny of tax is exacted from any other source. Governments have no right, and should have no power to take any part of the earned income of individuals while it permits certain individuals to appropriate the value created by the community. What is property? Man can justly own only what man has produced. Free enterprise will not be really free until this truth is recognized and is firmly embedded in our economic system.  |