Consequences of Land Speculation
are Tenantry and Debt on the Farms
and Slums and Living in the Cities
Upton Sinclair
[Reprinted from
Enclaves of Economic Rent, edited by C.W. Huntington,
published by Fiske Warren, Harvard, Massachusetts, 1924]
I know of a woman - I have never had the pleasure of making her
acquaintance, because she lives in a lunatic asylum, which does not
happen to be on my visiting list. This woman has been mentally
incompetent from birth. She is well taken care of, because her father
left her when he died the income of a large farm on the outskirts of a
city. The city has since grown and the land is now worth, at
conservative estimate, about twenty million dollars. It is covered
with office buildings, and the greater part of the income, which
cannot be spent by the woman, is piling up at compound interest. The
woman enjoys good health, so she may be worth a hundred million
dollars before she dies.
I choose this case because it is one
about which there can be no disputing; this woman has never been able
to do anything to earn that twenty million dollars. And if a visitor
from Mars should come down to study the situation, which would he
think was most insane, the unfortunate woman, or the society which
compels thousands of people to wear themselves to death in order to
pay her the income of twenty million dollars?
The fact that this woman is insane makes
it easy to see that she is not entitled to the "unearned
increment" of the land she owns. But how about all the other
people who have bought up and are holding for speculation the most
desirable land? The value of this land increases, not because of
anything these owners do - not because of any useful service they
render to the community - but purely because the community as a whole
is crowding into that neighborhood and must have use of the land.
The speculator who bought this land
thinks that he deserves the increase, because he guessed the fact that
the city was going to grow that way. But it seems clear enough that
his skill in guessing which way the community was going to grow,
however useful that skill may be to himself, is not in any way useful
to the community. The man may have planted trees, or built roads, and
put in sidewalks and sewers; all that is useful work, and for that he
should be paid. But should he be paid for guessing what the rest of us
were going to need?
Before you answer, consider the
consequences of this guessing game. The consequences of land
speculation are tenantry and debt on the farms, and slums and luxury
in the cities. A great part of the necessary land is held out of use,
and so the value of all land continually increases, until the poor man
can no longer own a home. The value of farm land also increases; so
year by year more independent farmers are dispossessed, because they
cannot pay interest on their mortgages. So the land becomes a place of
serfdom, that land described by the poet, "where wealth
accumulates and men decay." The great cities fill up with
festering slums, and a small class of idle parasites are provided with
enormous fortunes, which they do not have to earn, and which they
cannot intelligently spend.
This condition wrecked every empire in
the history of mankind, and it is wrecking modern civilization. One of
the first to perceive this was Henry George, and he worked out the
program known as the Single Tax. Let society as a whole take the full
rental value of land, so that no one would any longer be able to hold
land out of use. So the value of land would decrease, and everyone
could have land, and the community would have a great income to be
spent for social ends.
A few years ago, out here in Southern
California, a fine enthusiast by the name of Luke North started what
he called the "Great Adventure" movement, to carry
California for the Single Tax. I did what I could to help, and in the
course of the campaign discovered what I believe is the weakness of
the Single Tax movement. Our opponents, the great rich bankers and
land speculators of California, persuaded the poor man that we were
going to put all taxes on this poor man's lot, and to let the rich
man's stocks and bonds, his inheritance, his wife's jewels, and all
his income, escape taxation. The poor man swallowed this argument, and
the "Great Adventure" did not carry California.
So, I no longer advocate the Single Tax.
I advocate many taxes. I want to tax the rich man's stocks and bonds,
also his income, and his inheritances, and his wife's jewels. In
addition, I advocate a land tax, but one graduated like the income
tax. If a man or a corporation owns a great deal of land, I want to
tax him on the full rental value. If he owns only one little lot, I
don't want to tax him at all. Some day that measure will come before
the voters of California, and then I should like to see the bankers
and land speculators of the state persuade the poor man that the
measure would not be to the poor man's advantage!
. . . I have before me a
little book entitled "Enclaves of Economic Rent," by C. W.
Huntington . . . This book is published by Mr. Fiske
Warren, a millionaire paper manufacturer who lives at Harvard,
Massachusetts, and believes in the Single Tax by way of enclaves....I
sought to persuade Mr. Warren that a great crisis was impending; that
the inequality of wealth in our society a thing continually growing
worse, was bound to bring a smash-up long before mankind had been
persuaded to live in enclaves. To this Mr. Warren answered, in
substance: "You may be right; but if this civilization collapses,
something else will have to be put in its place, and it may be useful
to men to have a model of a better community."
. . . How are these
enclaves run? The principle is very simple. The community owns the
land, and fixes the site value year by year, and those who occupy the
land pay the full rental value of the land they occupy. Improvements
of any kind are not taxed; you pay only for the use of what nature and
the community have created. The community takes all this wealth and
uses it, first to pay all the taxes on the land the remaining money
being expended for community purposes, by the democratic vote of all.
What this means in practice you can see from the town of Fairhope,
Alabama. Fairhope began nearly thirty years ago, with three hundred
and fifty acres, and now has nearly four thousand acres. Its land is
estimated to be worth a million dollars. But instead of this wealth
being distributed among private owners, in accordance with the
guessing power or each individual, the whole rental value is the
property of the community, and the whole community prospers by the
labors of each one.
What this means in the way of moral values you may judge from one
sentence in the little book: and I will follow the example of the book
and quote this sentence in the same cold and unemotional fashion: "No
resident of Fairhope has been defendent in a criminal case in county
court." Perhaps I should add that there is no place except the
county court where anyone could be a defendent; there has never been a
court or jail or anything of that sort in Fairhope.
Or take the colony of Arden, Delaware, which is just south of
Philadelphia. I could not say that no resident of Arden has ever been
a defendent in a court - I myself having been one of eleven men who
were arrested by a constable from the city of Wilmington, and sent to
prison for the crime of playing baseball and tennis on Sunday! It is
that kind of humourous story which you read about Arden, and not the
seriousefforts which are there being made to solve a great and
pressing social problem.
In Philadelphia, as in all our great cities, are enormously wealthy
families, living on hereditary incomes derived from crowded slums.
Here and there among these rich men is one who realizes that he has
not earned what he is consuming, and that it has not brought him
happiness, and is bringing still less to his children. Such men are
casting about for ways to invest their money without breeding idleness
and parasitism. Some of them might be grateful to learn about this
enclave plan, and to visit the lovely village of Arden, and see what
its people are doing to make possible a peaceful and joyous life, even
in this land of bootleggers and jazz orchestras.
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