Seen on a private billboard, erected on an empty plot of urban land, in the early 1900s :

 

EVERYBODY WORKS BUT THE VACANT LOT

I paid $3600 for this lot and will hold it ’till I get $6000.

The profit is unearned increment made possible by the presence of this community

and enterprise of its people.  I take the profit without earning it.

For the remedy, read ‘Henry George’.

Yours truly, Fay Lewis

 

When you take a journey, whether by foot, by bicycle, or driving a car, if at some point you realize you’ve taken a wrong turn, you have two options : admit your error, and go back to take the right road, or forge on, hoping to come out someplace where you can change course and reach your destination anyway, even if not by the originally intended, shorter route…

Shall we give the benefit of the doubt to the economists advising our governments today, those wizards with chains of degrees fluttering behind their names, who are guiding our helms of State?  Surely they believe in the policies and decisions they advise?   And they’re the ones who ought to know… right?  They were educated to know…  So, who are we to question their policies?  We just have to trust the experts, shut up, and go along blindly, no?  If they can’t find solutions, it’s surely because there aren’t any, meaning a prosperous national economy is pie in the sky…   After all, progress, peace and prosperity, allowing citizens to live their lives pursuing happiness… that’s what all of us want, rich and poor, educated or not… Right?

Well, (happily) history is filled with the stories of humanity’s benefactors who didn’t fit into any of the molds society proposed for them… and even in the realm of economics, where most of us common folk feel out-classed by mystic knowledge beyond what ordinary mortals can hope to comprehend…   All those numbers and charts– common sense has nothing to do with it… Right?

Well, there once was a man, a brilliant fellow, but with little formal education because school had always bored him.  One of ten children born into a modest family (very much skirting the borderline of poverty) in Philadelphia in the mid-1800s, the boy dropped out of school at a young age, sparing his family the expense of educating him.  Instead, he pursued his passion : having observed in his home city the contrast of great wealth co-existing with abject poverty, he wanted to know how this was even possible.  Seeking an explanation and to understand the causes of poverty, he left home, shipping out to India as a cabin boy earning 6 dollars a month…  Of India, he would remember later (in addition to the poverty) his shock at seeing the many dead bodies of the poor, covered in vultures, floating down the Ganges, and how he, like everyone else, just got used to it…

When he returned to the States, he worked a number of menial jobs, then his father apprenticed him as a typesetter.  Just before the Civil War, he left again to cross the country, settling in San Francisco only slightly too late to take part in the Gold Rush.  Once again, he worked a number of menial jobs, until he was hired as a typesetter for a local newspaper, after which he continued to pursue his passion, studying the writings of the great economists, including Adam Smith and David Ricardo, always seeking the causes of side-by-side wealth and poverty.  And he began writing his observations and analyses, then submitting them, anonymously, to the same newspaper for which he worked as a typesetter.  Those articles, also published anonymously, were well-received by the public and eventually prompted the owner of the paper to seek the identity of this mystery author.  Once found out, Henry George was promoted to the paper’s editorial office where his research and observations continued to inspire articles that were now published under his own name, to growing local acclaim.

One of George’s first economic analyses concerned the widely-accepted theories, at the time, of the Englishman, Thomas Malthus. In An Essay on the Principle of Population, published in London in 1798, Malthus had invoked science and empirical data to insist that the human population would increase faster than food could be produced to support it, and that the inevitable result would be war, poverty and suffering.  For more than half a century, by then, the world’s intellectual elite had been under Malthus’s spell, dominating economic thought and public policies.  Overpopulation was the problem, the cause of poverty, and due to an increasing work force pushing down wages and the standard of living.

But George demonstrated that the facts did not support Malthus’s theories, and that, anyway, they were not based in science.   Indeed, the productivity of labor does not decline as the population increases.  On the contrary, productivity increases even faster than the density of the population.  George presented the empirical proof that Malthus’s contention, that poverty was caused by overpopulation, was simply, factually wrong and that his methods of analysis were not scientific.  However, he himself had still not, as yet, identified the real cause…

Sent by his newspaper to work for a time in New York City, George observed that the greater concentration of wealth in that vast metropolis seemingly produced an even greater, more abject poverty than what was found in less population-dense San Francisco…  But the reasons, the causes, continued to elude him, until one day, back again on the West Coast, and horseback-riding in the foothills behind the City-by-the-Bay, he stopped to casually ask the price of local land from a local man.  Upon hearing the reply, insight struck George like a thunderbolt :

‘… 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…’

The year was 1870, Henry George was married with four children and struggling (as ever) with poverty, trying to launch his own newspaper, while continuing his reading, observing, and writing.

‘… Why should we not go back to the old system, and charge the expense of government upon our lands?…’

‘… Land taxation does not bear at all upon production; it adds nothing to prices, and does not affect the cost of living.  As it does not add to prices, it costs the people nothing in addition to what it yields the Government;  while as land cannot be hid or moved, this tax can be collected with more ease and certainty, and with less expense than any other tax;  and the land-owner cannot shift it to any one else…’

 

George’s newspaper venture came to an end when a creditor/admirer who had lent him the capital he needed was required to take it back to cover his own finances, which forced George to abandon the project.  But his admirers were now numerous and some were influential.  George requested the Governor of California to give him a job where he could work for the State, yet have enough free time to continue his research into the causes of poverty, and develop his thinking about the remedy he had identified: his system not to tax structures on land, or anything else, but only the land itself.  The Governor responded by appointing him State Inspector of Gas Meters…  and he was off and writing.

‘… A tax upon the value of land is the most equal of all taxes, because the value of land is something that belongs to all, and in taxing land values we are merely taking for the use of the community something which belongs to the community…’

 

George argued that Land Value Tax was more efficient than other types of taxes, like sales tax, excise tax, income tax and corporate tax, all of which can slow the economy by discouraging production.  A single Land Value Tax, on the other hand, would promote activity by discouraging the few from hoarding land, or holding it for speculation…  At the same time, a Land Value Tax would not discourage labor, nor discourage investment (capital).  A Land Value Tax on unimproved land would encourage its improvement, or encourage its sale to someone who would improve it (by building houses, or farms, or factories, which would provide for payment of the tax).  At the same time, workers would be able to keep the product of their labor, while the revenue generated for Government would still be enough to pay for public goods and services… with even the eventual, distinct possibility of a universal basic income…

‘The increased productivity of labor only increases rent.  Thus, all the advantages of progress go to those who own land. Wages do not increase.  Wages cannot increase.  The more labor produces, the more it must pay for the opportunity to make anything at all…’

The book George wrote, Progress and Poverty, was self-published in 1879 and promoted by word-of-mouth.  By 1880, thanks to his popularity and to the support of influential admirers, an established publisher took it on.  Soon, George set off to promote his book and the Single Tax System (as the Land Value Tax came to be called) in Europe, where the number of his admirers and the supporters of his remedy were growing fast.  In fact, Progress and Poverty became a worldwide best-seller, more read by the public at the time than any popular fiction, and it still is today the all time best-seller among books on political economics.  George was even widely hailed as the third most famous man in America, after Thomas Edison and Mark Twain.

‘The only indubitable means of improving the position of the workers which is at the same time in conformity with the will of God consists in the liberation of the land from its usurpation by the landlords.  The most just and practicable scheme in my opinion is that of Henry George, known as the Single Tax System.’ — Leo Tolstoy

But George’s blueprint for revolutionizing the distribution of wealth, making it equitable and thereby putting a simple, easy end to poverty, once and for all, was not to the taste of everyone…  Accused by landowners and speculators of being, in turn, an anarchist, a nihilist, a communist and a socialist, George responded that he was nothing of the kind… He was, in fact, in favor of capitalism, but absolutely opposed to the system being rigged in favor of the wealthy.  In his reform, land that was already owned would not be confiscated:  the landowners would keep their land, but pay taxation.  In fact, the rent that landlords charged was the real confiscation– these sums were the wealth which belonged to the community, and being taken from those least able to part with it.

A worried Joseph Chamberlin, in England, noted the need to nip George’s ideas in the bud, which is what would eventually happen.  In the 1920s and 30s, Rockefeller and Carnegie endowments and grants to educational institutions permitted the few to influence the contents of both history and economics textbooks as well as encyclopedias, ultimately consigning Henry George and the Single Tax System to oblivion…

But in the meantime, and despite the efforts of wealthy landowners and speculators to stop his ideas, George’s popular fame continued to grow.   He was persuaded by his entourage to stand for mayor of New York City in 1886, accepting the challenge as one more opportunity to spread his ideas.  And he came in at a surprisingly strong second place in the election, despite flagrant voter fraud.  After that, he continued writing articles and giving speeches, including one at the University of California at Berkeley, to an essentially hostile audience, in which he said:

For the study of political economy, you need no special knowledge, no extensive library, no costly laboratory. You do not even need text-books, nor teachers, if you will but think for yourselves.  All you need is care in reducing complex phenomena to their elements, in distinguishing the essential from the accidental, and in applying the simple laws of human action with which you are familiar.’

He became a frequent traveler to Europe, and in 1890 visited Australia, as well, always meeting with social reformers to advance support for the Single Tax System.  But at the end of 1890, he suffered a mild stroke, indicating that his punishing schedule had fragilized his health.  Despite intentions to undertake more speaking tours, and to visit Russia to meet with his great admirer, Tolstoy, George was obliged to slow down.  In 1897, he suffered another stroke, the consequences of which would prove fatal, and most likely due to the mismanagement of his care by attending doctors…

Today, the means and motives of the heirs of Rockefeller and Carnegie, and of the others like them, are playing out ever more flagrantly to a public not nearly as stupid as the forerunners of these self-serving policy-makers had thought, back in the days when they were consolidating their rigging of the system…  Still today, Henry George’s Single Tax remains a simple, just and easily implemented remedy for poverty in society, if ever that once more becomes a desired goal.  All that is required is decision-makers genuinely committed to the Common Good, who will deconstruct the present system of taxation under a Central Bank (in the U.S., the Federal Reserve Bank) which is designed to keep citizens on a treadmill of camouflaged wage slavery until the day the system implodes, unveiling stark, pre-feudal poverty in its wake.  It will likely take another giant, of the stature and integrity of Henry George, to preserve humanity from such an ugly fate.