Is Marxism or Land Value Taxation True Land Reform?

Ralph W. Borsodi

[Reprinted from Equal Rights, May 1987]

Your editorial "Decrying Marxism" is enough to make my old friend, Wolf Ladejinski, turn over in his grave. Wolf worked for land reform for over two decades in Asia; he knew full well that one cannot work with Marxists on land reform.

The Marxists espouse the principle that any means is justified in pursuing the end of the Marxist utopia -- the classless society. The barbarities the Marxists have committed in the 20th century against people who disagree with them compare with the worse of the religious inspired barbarities of the preceding centuries. The Marxist have been particularly vicious in their treatment of people living on the land.

What puzzles me is how one can tie the mid-l9th century ideas of Karl Marx (an urban intellectual elitist) into land reform issues in the United States at the end of the 20th century. I wonder what kind of land reform "Equal Rights" is really espousing. How specifically do its policies tie in to keeping small farmers on the land, to keeping the poor and elderly in their homes, and to extending land ownership to those who wish to own farm, suburban or urban land.

I find your editorial statement that the ruling elite in the country are the landowners in conflict with the reality I know. The landlords have no little voice in government -- particularly in local governments--but the elitist ruling powers in the United States have been for the better part of this century in the hands of industrialists, financiers, the media, academia, the church, organized special interest groups, and a complex of industrial and military interests.

Post World War II city landlords have often been wiped out in decaying urban centers. The government has been subsidizing suburban development. Economists should carefully consider the significance that people do not rush to live in these abandoned urban areas. Large areas of the Bronx in New York City have remained depopulated even though land could be obtained at nominal costs. Landlordism, or monopoly in land holding, cannot be considered country's only economic problem, which if broken up, leads to utopia.

In the meantime if we accept land as a transferable commodity one must face the fact that if it is proposed to tax unearned gains away from lucky landowners one ought to compensate unlucky landowners for losses. (When communities decay land values fall.) Taxation policies should be equitable.

I do not understand what kind of land reform you are advocating. You seem to be realistically pursuing higher tax rates on urban land, which up to some level of taxation may encourage the use of urban land. Tax policy may then be a tool for preventing land being kept out of use or for promoting urban renewal. However, if the landowner can find no economic use of the land at a given level of taxation, he will simply abandon the land to the community.

You seem to be generally silent on the reform of taxation of farm property and on farm land holding. If you were to raise taxes on farm property (to discourage holding land out of use) small farm owners would be forced into bankruptcy in larger numbers than at present. Farm property values in many farm areas have been deflating. Farm produce in many areas cannot be sold for its cost of production. The issues of farm policies are complex. In many areas we ought to stop conversion of farm land into commercial use because of the water run-off and other ecological concerns.

What Kind Of Land Reform?

The taxation of suburban homeowners and commercial users interplays with the same policies in urban areas, affecting population shifts. I should be most skeptical that some simple tax formula will solve the problems created by the great concentration of the population of the U.S. along its coasts.

Your recent editorial and previous issues of "Equal Rights" have left me with a confused feeling as to what kind of land reform you are really pressing for. You seem to be generally pursuing the Georgist orthodoxy that the single tax will (in ways unexplained by you or Henry George) create an economic Eden at any time under any society and under any organization of economic activity. How the total tax requirements of all levels of government will be reorganized -- a most critical matter -- is left totally to the imagination. Economists cannot ignore questions as to how we can support government at all levels and what are the effects of our tax policies.

Obviously, I have strong feelings on the need for land reform, else I would not be writing you. However, I am skeptical that the advice of Karl Marx or that of Henry George is going to move us much down the road as we move into the 21st century. I am always willing to listen, but I believe that we have to be specific about land reforms in the way land is currently held and used--if we are going to get anywhere. Generalities dating back to the age of Quesnay will not serve us.