“What has destroyed every previous civilization has been the tendency to the unequal distribution of wealth and power”

-Henry George

 

Henry George

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Henry George

Henry George (September 2, 1839 – October 29, 1897) was an American political economist and the most influential proponent of the “Single Tax” on land, also known as the land value tax. He was the author of Progress and Poverty, written in 1879.

George began as a Lincoln Republican, but then became a Democrat, once losing election to the California State Assembly. He was a strong critic of railroad and mining interests, corrupt politicians, land speculators, and labor contractors.

One day in 1871 George went for a horseback ride and stopped to rest while overlooking San Francisco Bay. He later wrote of the revelation that he had:

“

I asked a passing teamster, for want of something better to say, what land was worth there. He pointed to some cows grazing so far off that they looked like mice, and said, ‘I don’t know exactly, but there is a man over there who will sell some land for a thousand dollars an acre.’ Like a flash it came over me that there was the reason of advancing poverty with advancing wealth. With the growth of population, land grows in value, and the men who work it must pay more for the privilege.[1]

”

Furthermore, on a visit to New York City, he was struck by the apparent paradox that the poor in that long-established city were much worse off than the poor in less developed California. These observations supplied the theme and title for his 1879 book Progress and Poverty, which was a huge success, selling over 3 million copies. In it George made the argument that a sizeable portion of the wealth created by social and technological advances in a free market economy is captured by land owners and monopolists via economic rents, and that this concentration of unearned wealth is the root cause of poverty. George considered it a great injustice that private profit was being earned from restricting access to natural resources while productive activity was burdened with heavy taxes, and held that such a system was equivalent to slavery – a concept somewhat similar to wage slavery. The appropriation of oil royalties by magnates of petrol-rich countries may be seen as an equivalent form of rent-seeking activity: since natural resources are given freely by Nature rather than being products of human labor or entrepreneurship, no single individual should be allowed to acquire unearned revenues by monopolizing their commerce. The same holds true about every other mineral and biological raw resource.

 The Single Tax on Land

Henry George is best known for his argument that the economic rent of land should be shared by society rather than falling into private hands. The clearest statement of this view is found in Progress and Poverty: “We must make land common property.”^[2] Although this could be done by nationalising land and then leasing it out George preferred taxing unimproved land value, in part because this would be less disruptive and controversial in a land where titles has already been granted to individuals. With this “single tax” the state could avoid having to tax any other types of wealth or transaction. Introducing a large land value tax causes the value of land titles to fall correspondingly, but George was uncompromising about the idea of compensation for landowners, seeing the issue as a parallel to the earlier debate about compensating former slave owners.

Modern economists like the 1976 Nobel Memorial Prize winner Milton Friedman agree that Henry George’s land tax is potentially beneficial because unlike other taxes, land taxes impose no excess burden on the economy, and thus stimulate more rapid economic growth. Modern-day environmentalists have resonated with the idea of the earth as the common property of humanity – and some have endorsed the idea of ecological tax reform, including substantial taxes or fees on pollution as a replacement for “command and control” regulation.

 http://en.wikipedia.org/wiki/Henry_George