The Professors and the Single Tax
Charles B. Fillebrown
[Reprinted from the book, Natural Taxation,
published 1917.
Part I / The Authorities / Chapter 14]
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
- A Perplexed Philosopher,
p. 70.
- Natural Taxation, p.
215.
- Ralph Waldo Emerson in address
"Nature" at Waterville College, Maine, August 11, 1841.
- Taussig, F.W., Principles
of Economics, Vol. II, pp. 75 and 102.
- 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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