The History of Poverty:
England and Australia

W. Arthur Dowe

[A presentation made at the International Union of Land Value Taxation conference, Sydney, Australia, 1993. Reprinted from a booklet of conference papers]

Part One: England

Massive poverty, closely linked with massive affluence for the few, is the great riddle of our age, which not to answer is to be destroyed. It is at the heart of most of our great social problems, and threatens to destroy our whole civilization. Our modern wars and armaments, the class struggle, unemployment, and our international upheavals and tensions, are in the last analysis clearly attributable to poverty. The disastrous effects of it in every area of life are more than obvious.

The Georgist movement is committed to the investigation and analysis of this poverty. We claim to have investigated and analyzed it, and to have found the causes and the cure, which is the abolition, not the relief, of poverty. Both the causes and the cure become plain to any earnest and sincere investigator.


Charity and Relief

The whole community should by now be rather tired of the never-ending appeals for charity, which are not only very expensive and labour-consuming but are evidently not reducing the poverty. And we should be even more tired of paying the heavy and destructive taxes imposed on us by well-meaning but ignorant governments who endlessly pour untold billions down the bottomless pit of the relief of poverty. In spite of all this charity and taxation the leaders of our charities monotonously chant how much worse the poverty grows every years.

It is true that the great army of do-gooders are genuinely concerned about the horrific plight of the poverty-stricken throughout the world, but the concern is confined to surface relief and does not extend to the investigation of basic causes. This is natural, because most of the bodies working and appealing for the relief of poverty are headed by an imposing array of well-intentioned and wealthy members of the privileged classes who cannot be expected to do any radical investigation which would reveal that they derive their wealth and prestige from the very same poverty which they would be investigating. There is a causal connection, as Progress and Poverty demonstrates, between the wealth and the poverty. Though the great majority of both rich and poor are unaware that the poverty springs from misgovernment and injustice, there is nevertheless an instinctive suspicion on the part of the rich and privileged that a genuine investigation would reveal unwelcome facts and threaten all privileged and unearned incomes.

On the other hand, the poverty-stricken masses are not only ignorant, bewildered, apathetic and lethargic, but are very ill-equipped and unwilling to think. The common attitude is: "If you make me change my habits I'll hate you, but if you make me think I'll kill you." Poverty is itself a powerful obstacle to knowledge and progress. It represses, freezes and blunts men, and makes them easy prey for the rich and well-educated to manipulate and mislead. As Gray's Elegy so profoundly says:

But knowledge to their eyes her ample page
Rich with the spoils of time did ne'er unroll,
Chill penury repressed their noble rage
And froze the genial current of the soul.

Faced with these daunting obstacles, my main objective in this paper is the spread of knowledge, which I try to do through the illuminating study of history. I appreciate the privilege of sharing this task with you and with so many talented Georgist writers and speakers around the world. I hope that this paper will encourage them in their efforts. The study of history is a powerful aid to education, and has been ably pursued by many Georgists of the past and present.


Should we support charity?

I do not, of course, advocate discontinuing public and private charity. We cannot allow the poor to starve to death while we wait: for the public to become enlightened. I myself support World Vision, and have unsuccessfully put views. before them. There will always be some poor and needy with us, even after the arrival of good and just government, though poverty in our sense will then disappear and most of our present charity will then be unnecessary.


Poverty In other countries

By speaking of poverty in England and Australia I do not imply that it is less important elsewhere: Quite the opposite. It is even worse elsewhere, and so are the evils which beget it. And there is widespread ignorance of the whole subject. But I am not qualified to speak of other countries and so confine myself to the two which form my background. One of the best books on world poverty is De Castro's Geography of Hunger (1952), which is a United Nations publication. It showed that in 1952 Australia was the only county in the world which was free of hunger. And I think that is still so. And I am particularly distressed about this.

English history is of great significance, because from England so many countries have derived the misgovernment and social inequalities which have so impoverished them. I am not an iconoclast, and have no desire to denigrate England which is my own fatherland. Much of England and its history is good, quaint, picturesque and pleasing. The good and bad are inextricably mixed.


What is poverty?

Having covered the preliminaries we can now launch into our subject by defining the word, "poverty." This dire word has four different meanings, or possibly more.

(1) Normal or natural poverty follows laziness or incompetence. It is individual conduct -- our own fault. In Proverbs, Chapter Six, we read, "Go to the ant, thou sluggard; consider her ways and be wise ... a little sleep, a little slumber, a little folding of the hands to rest, and poverty will come upon you."

(2) Poverty inflicted on some by the crime or misconduct of others as theft, personal injury, property damage, slander or racial discrimination. The only remedy for this type of poverty is the observance of the Golden Rule.

(3) The poverty which results from illness, old age or accident, for which nobody is to blame. Insurance can provide some protection, and we are approaching compensation for all victims out of the community's fund, i.e. out of economic rent, as in an effective way in any otherwise more primitive age was done in England through the frank-al-moign land tenure. If we do it through taxation the benefits will be largely destroyed.

(4) The fourth type of poverty is the only one which concerns us in this paper, namely: world poverty.


World poverty

It is world-wide and anti-social, caused by the injustices of governments. It has many forms, including oppression, slavery, land-conquest, taxation and political corruption, all of which in the modern world are caused by bad government, i.e. political injustice and partiality. Some of the less obvious forms of bad government which cause poverty are racial favouritism, protectionism, and extravagance in government. For example, our new Parliament House in Canberra cost $A1 billion, and is nearly all used to promote poverty.

None of these are economic, but anti-economic. They are all political. Although our production of wealth and services is enormous, our bad laws and practices take very much of it out of the pockets of the producers and put it into the pockets of non-producers, wasting an incalculable amount of it on the way. Let us ever remember the inspired words of Richard Cobden (to John Bright, quoted by Henry George in Chapter 20 of Protection or Free Trade): "There are in England women and children dying with hunger, with hunger made by the laws. Come with me, and we will not rest until we have repealed those laws."


The history of poverty

The political history of England is a process whereby the ruling classes have converted the subject classes into serfs who physically occupy the land but have been deprived of their rights in it and are now landless. They now live in a country of two nations - those who legally own the country, and those who are permitted to live in it as their subjects who pay them tribute for the permission. Benjamin Disraeli, once conservative Prime Minister of Britain, says in his novel Sybil: "The Privileged and the People formed two nations" (Brabham edition, 1927). This situation is very much a reality in both England and Australia, where the current prices of land indicate the extent to which the "lower" classes must pay the "upper" classes for permission to live in the country.

To understand all this you must be fired with an intense desire for the welfare of the peoples of the world, and you must use your intellect to study and learn. Robert Browning says (Rabbi Ben Ezra):

Then welcome each rebuff
That turns earth's smoothness rough,
Each sting that bids
Nor sit nor stand but go
Be our joy three parts pain
Strive and hold light the strain,
Learn nor account the pang,
Strive, never heed the throe.

Our study must be effective. How can we study effectively? By following Francis Bacon's advice in his Essay on Studies: "Reading maketh a full man, conference (i.e. discussion) a ready man, and writing an exact man." So read widely, discuss as much as possible, and write what you have learned.

To commerce with modern poverty in England we need go back no further than the Norman Conquest, the most natural and spectacular starting point. Before 1066 poverty in our sense was unknown except for the natural consequences of military activity, which everybody took for granted as normal or inevitable. After the Conquest, though the standard of living was by our standards extremely low", and the English were oppressed and kept rigidly in their place by their Norman conquerors, there was no destitution or starvation in the midst of plenty, no unemployment and no taxation, because the introduction of the feudal system in 1066 did not end or even alter every Englishman's access to land. This is not to deny that the gross inequality between the Norman conquerors and the conquered English developed into the tyranny and injustice which later deprived the English of their rights and created the poverty.

Substantial universal rights in the land lasted until roughly the 17th century, though the land-enclosures had commenced as early as the 15th century and the Barons had commenced to throw off their feudal obligations to the Crown as early as the 13th century (as witness Magna Carta, 1215). The history of poverty in England is progressive from those early centuries onward, and consists of corrupt politics, of encroachnients and oppression by national and regional rulers, of unjust laws and practices developing into customs and laws.

Before the best period of English history for the common people disappeared in the 16th century, and England changed from Merrie England to poverty and disinheritance, tremendous changes occurred in the feudal land-tenures. So I must briefly explain what those land-tenures were.

The feudal land-tenures

After 1066, William immediately reduced the English to complete subjection to the Normans, and assumed complete control of all the land. You have all heard of Domesday Book. Every piece of land was made the subject of tenancy under the king, and there were three kinds of tenancy:


(1) The military tenures

Roughly one-third of all English land was granted to the Norman barons as tenants of the king. The barons were the military chiefs who had helped William to conquer England. They held the land under fealty, i.e. under sworn allegiance to the king, to serve him in all his military undertakings and to provide him with all the necessary men-at-arms and necessities of war whenever he called on them for it. Thus all the king's wars and military operations were carried out without expense to the king, without debt, and without taxes. Thus, even after the One Hundred Years' War there was no public or private debt. This system lasted until the 17th century, i.e. for six centuries of the greatest prosperity that the English people have ever known, although it was a period of turbulence and tyranny.

But almost from the beginning the barons were rebellious, conspiring continuously to throw off their obligations, with varying success. Under a weak king, e.g. John in 1215, they prevailed. And even when the Tudors subdued them they ultimately and finally succeeded in throwing off their military obligations, the last vestiges of which were replaced under Cromwell and Charles II by an excise tax. Since then the public has borne the burdens of war, and of peace, through taxation, and I need not tell you what an astronomic figure these burdens have now become. Apart from the financial burdens, if we could only resume the obligation of the land-owners to pay for all wars to protect their country I think that there would be no more danger of war.

Thus the first great step towards poverty was taken when the landowners threw off their feudal obligations, and by legislation transferred them to the backs of the people.

In Modern Man and the Liberal Arts by Francis Neilson (1947) I find the following (p.112-3):

"In 1845 Richard Cobden said in the House of Commons: "… For a period of 150 years after the Conquest the whole of the revenue of the country was derived from the land. During the next 150 years it yielded 19 twentieths of the revenue -- for the next century it was 9 tenths. During the next 70 years to the reign of Mary it fell to about three fourths. From this time to the end of the Commonwealth, land appeared to have yielded one half of the revenue. Down to the reign of Anne it was one fourth. In the reign it was one seventh. From 1793 to 1816 (during the period of the land Tax) land contributed one ninth, from which time to 1845 one twenty-fifth only has been derived from the land. Thus the land which anciently paid the whole of taxation pays now only a fraction, notwithstanding the immense increase in the amount of the rentals..."

Neilson continues:

The imposition of excise duties in place of the former burdens of the fisc sent the landless, who had been cut adrift from their commons, with empty bellies in search of work in the towns. This war of the landlords against the peasants has never been exceeded in severity by any conquering state . . . The landlord's war in England was prosecuted century after century, generation after generation. There was no let-up to it. And it terminated in scenes of crowning horror and shame.

So much for the legalized termination of the military tenures.

(2) The ecclesiastical tenures

Also under feudalism about one-third of the land of England was held by the church from the king under a land-tenure known as Frank-al-Moign (which might be translated as "free of charge"), the church's obligation being to provide free the relief of poverty, the care of the aged and the ill, all education and church services. Under this system, far more enlightened than anything we have today, there there was no poverty or destitution in the modern sense. The whole of this tenure was destroyed by Henry VIII in 1536 by the dissolution and confiscation of the monasteries. The lands were sold for Henry's financial benefit or distributed among his favourites, who became aristocrats and occupied the monasteries as their homes. as many of their successors still do. For example, the Duke of Bedford resides in Woburn Abbey. (See G. K. Chesterton's A Short History of England (1917), p.5 and pp. 143-150).

Whether or not the monasteries had deteriorated, which I need not discuss, and whether or not Henry had any justification in dissolving them, the enrichment of the "new nobility" and the disappearance of the monasteries strongly increased poverty and was a major factor in changing the whole of England for the worse. The poverty increased so greatly, and so much suffering was caused, that Elizabeth I was forced to enact the Poor Laws and provide the workhouses. But by that first phase of the welfare state, as also by the full force of it in our century, although there has been some improvement in the intensity of the poverty, the poor have been reduced by a massive bureaucracy to a cringing acceptance of the public dole paid largely out of their own pockets.


(3) Free and common socage

The third type of tenure was known as Socage, which is defined in my dictionary as a tenure of lands by fixed and determinate service. It was a civilian tenure which did not involve fealty, and of which there were two kinds: free and common, i.e. he tenants were either free or "common." The free tenants were mainly the civilian successors of the Norman conquerors, e.g. the Lords of the Manor, who provided the king with all his civilian and domestic requirements, e.g. the administration of justice and personal and household needs, all of which in those days were primitive when measured by our standards.

I cannot enlarge upon the very complicated system of civil taxes which has now displaced the goods and services provided for the king under free and common socage by the land-holders without taxes, or on the rebellion of the wealthy upper middle classes at the time of Hampden and Oliver Cromwell, which rid the land-owning class both of their military and socage obligations and threw the burden onto the people and led into the great poverty of the Industrial Revolution and of the starvation of the "hungry forties." The obligations of the land-owners under free and common socage have now disappeared and been replaced by taxation, except on a few ceremonial occasions, such as the coronation when both church and state do homage and acknowledge that they hold their lands from the king and perform such pageants as holding the king's stirrup, providing the roast beef for the coronation banquet, etc.


General comments on the change: prosperity to poverty

Whether the enclosures were the worst of the acts and processes of injustice and corruption is open to question. It is difficult to assess with certainty whether it was the enclosures, the dissolution of the monasteries, or the rebellions of the barons in throwing off the obligations of the military tenures. lam inclined to think that the enclosures, great as they were, were the least of the three. For one thing, as many orthodox historians have pointed out in trying to justify the enclosures, the change from medieval to modern tillage, of which the enclosures were a part, was inevitable. Nevertheless the unjust and brutal way they were often carried out, and the fundamental breaches of trust involved, cannot be justified, and the poverty and misery which resulted, have meant that the enclosures form part of the history of poverty in England. I quote from page 283 of Trevellyan's History of England:

The effect of the cloth trade (i.e. the enclosures and conversion of tillage land to sheep-runs) was not wholly for the good … like every other process of economic change, it had its army of victims and its tale of agony. Since it overthrew status and custom in favor of cash nexus and the fluidity of labour, it brought to the newly emancipated villein great opportunities and great risks, and to the capitalist farmer and landlord temptations to grow rich quickly at the expense of others. In certain districts there were enclosures of the open fields of the village for pasture. implying the eviction of many plowmen to make room for a few shepherds. …Many of the evicted plowmen wandered off to swell the ranks of the "sturdy beggars," "staff strikers" and "rogues forlorn" who figure so largely in the literature and Statute Books of Tudor times. The beggars were the characteristic evil of the 16th century … and enclosing landlords who set them adrift on society were denounced by moralists like Thomas More and Hugh Latimer.

I might add that Trevellyan, unlike More and Latimer, presents the "orthodox" view of the enclosures.


Summary of the great change

We have briefly seen how England in the course of about five centuries changed from general prosperity to poverty and misery (except for the privileged classes, who brought the change about), and we have also seen that the rebellion of the barons, the enclosures and the suppression of the monasteries were the main causes of the great change. Under the feudal system the land was held under conditions so as to provide for all public services out of the land-tenures or tenancies. Great prosperity for the "lower" classes developed out of this, and England was known as Merrie England, about which you can read in Thorold Rogers's Six Centuries of Work and Wages and very many other histories. The 13th, l4th and 15th centuries were known as the Golden Age. Distinguished authors have included J. R. Green, Francis Neilson, Trevellyan (already quoted), Edgar Buck and William Cobbett, Karl Marx, and Our Older Nobility (1910). Many authors inevitably present the point of view of the ruling classes, but the facts come through clearly. Perhaps the best of all books on the subject is Graham Peace's The Great Robbery, with its maps showing the enclosures and land-holdings in each county.

Briefly reviewing the three great steps to poverty:

(1) The military tenures lasted in theory, though continuously diminishing, until the 17th century when the few remaining obligations were replaced by an excise tax. They had begun to diminish when the barons combined against the king as Early as the 13th century. The royal writ "quo warranto" was issued by the king against barons who refused to fulfill their obligations, but the Earl of Warienne produced an old rusty sword and said, "This, sirs, is my warrant." When the king was strong he prevailed, and when he was weak the barons prevailed. Ultimately the Tudor kings are supposed to have subdued the barons, but in fact the barons won and they no longer rendered military service for their lands. They are now simply tenants in fee simple, without obligations in respect to their lands Wars are financed by taxation and borrowing, astronomical loads of national debt, and all the wastage and distortions which spring from taxes and debt.

(2) The dissolution of the monasteries. The reasons for Henry VIII's gigantic robbery and cruelty were complex. Probably the chief one was his overthrow of the Pope's jurisdiction in England, to which the monks were opposed and which many of them resisted, so that he considered, or pretended to consider, them to be dangerous. His natural cruelty was aroused by the resistance. There was also his greed and tyranny in disposing of many of the monasteries for his own financial gain, e.g. at St. Alban's.

The monasteries had alienated many; among other things, they had themselves taken part in the enclosures for their own benefit.

Among the many disasters suffered by the people through the dissolution of the monasteries was that the new aristocrats who took over the monastic lands and buildings, in contrast to the monks, became part of the land-owning class who oppressed the poverty-stricken people. Trevellyan says of the new cloth-making, weaving and shearing class who rapidly became wealthy and influential (p.283): "The richer of them, buying land and intermarrying with needy squires, founded new "county families." Not a few of them shared in the Abbey lands, having ready cash with which to join in the fierce land speculation which followed the dissolution... The men of the new wealth were indispensable to Elizabeth."

The growth of the wool industry was thus intimately connected with both the enclosures and the dissolution. Later, Queen Mary restored the Roman Catholic religion without much difficulty, but found the wresting of the monasteries from their new owners a much tougher and entirely different task, in which she failed miserably.

To give us an idea of the tremendous effects of the dissolution on the history of poverty in England one need take only one example: What has happened to the Westminster lands, now held by the Duke of Westminster? His fabulous holdings include the whole of Mayfair. He has become one of the richest men in the world, and one of the world's greatest land-owners.

(3) The enclosures were one of the three great acts of injustice which I have described and which have substantially contributed to modern poverty. Their effects are obvious and lasting. In all, between 1702 and 1876 alone, about 7,000,000 acres were enclosed. Earlier they had caused great local distress and misery, but made little difference to England as a whole at that time. But in the long run they have made the most profound difference. Though they enabled the whole production of England to be modernised and increased. They were an effective cause of converting England into two nations, the few thousand privileged land-owners and the millions of landless.

The three great changes took full effect with the Industrial Revolution early in the 19th century, with a peak of intense poverty which has in our century resulted in the Welfare State; which, in turn, has far from abolished the poverty but has modified the extremes of it, and has left the extremes of wealth unmodified, side by side with general and severe poverty, while bureaucracy, Parkinson's Law, public and private debt, and massive waste abound. The poor have been reduced to abject subservience to the bureaucracy, and even starvation still exists. The class war in England, so noticeable to Australians, rules in full strength.

So Shakespeare's famous words, in Richard II, put into poetic words the truth of the Broken Trust:

This land of such dear souls, this dear, dear land
Is now leas'd out -- I die pronouncing it --
Like to a tenement or pelting farm;
England, bound in with the triumphant sea,
Whose rocky shore beats back the envious siege
Of watery Neptune, is now bound in with shame,
With inky blots, and rotten parchment bonds;
That England, that was wont to conquer others,
Has made a shameful conquest of itself.

There is still time, and still hope, because not everybody is entirely unaware of England's history. For instance, let me quote for your enjoyment a passage from a modern non-political book, Domestic Life in England by Norah Lofts (1976) which very briefly tells of the rise of modern poverty in the midst of plenty after the War of the Roses:

"The wealth which paid for the fine new houses, extravagant clothes and gargantuan meals came mainly from a more economic use of agricultural land, enabling the country to produce a surplus above the needs of subsistence, which fed the towns and was traded abroad. This was achieved by the enclosure of waste land, demesne land, common land and open strips into large arable fields or pasture for sheep. As a result many peasants (nearly all now freemen) were evicted from their small-holdings, or lost their rights to the common land, and labourers were put out of work. ...The numbers were small compared with those who were to suffer in the 18th century, but to concerned observers it seemed as if a whole way of life was being broken up. Sir Thomas More protested that 'sheep eateth men,' and in his Utopia, published in 1516, described the fate of the peasant farmers: 'The husbandmen be thrust out of their owne, or els either by coveyne and fraude, or by violent oppression, they be put besydes it, or by wrongs and injuries they be so weried that they be compelled to sell all; by one means therefore or by other, either by hook or crooke, they must need depart away, poore, selye, wretched soules.'"

Imagine the effect of the dissolution on top of all this! And on the point of the great evictions, see William Cobbett's Legacy to Labourers. And also note how the great throwing off of feudal obligations by land-holder, including the new English rating system (which I understand has been very recently made even worse by the new Poll Tax legislation), culminated in the great Broken Trust by which England has been changed into two nations, the rich and the victimised poor.

I will close with a heartfelt salute of affection to Old England from a 2Oth-century English poet, Harold Begbie, taken from his poem Britons Beyond the Seas:

Loved, you are loved, O England
And ever that love endures
And mightier dreams than yours
Cleaner Londons, and wider fields,
And a statelier bridge to span
The gulf that severs the rich and poor
In the brotherly ranks of man.

Fortunately all these great and tragic disasters of English history can be reversed by one radical political measure of justice, i.e. the resumption by the people, through their government, of the economic rent of England to constitute the natural public revenue of England, so that taxation, that other great injustice, can be discontinued. We shall then have the great delight of seeing Merrie England reappear.

The history of England reveals how national prosperity was changed into degrading poverty. And a study of the two social sciences -- ethics and economics -- shows how that poverty can again be changed, this time into prosperity.

The evils of the past cannot be blotted out, but they can be reversed for the future.

We can even outdo the splendour of Merrie England -- we can restore to the working masses full opportunity to employ themselves, with all the extra opportunities added by modern science and by the ethical practices outlines in the Sermon on the Mount, to which the English people still profess attachment. We can eliminate the privileges of the small minority who reap without sowing, so that the producers can reap economically and plenteously. And we can ensure that those who through age, illness or accident cannot produce receive their fair share of the wealth and services bestowed on the people in the lavish bounteousness of nature by that great social surplus: economic rent.

So all the three great historic disasters can be reversed, and the land now fenced off from the people will again be open and accessible to all, though without impairing free and equitable private possession.

We have a great task ahead of us. My hope is that this paper will encourage and arm our Georgist workers and writers to increase their efforts and effectiveness while maintaining their obedience to the heavenly vision.

Part II: Australia

In this study I must pass over much of Australia's well-known history, such as that of the aborigines, the explorers, the wool industry, the squatters, the gold rush, the Eureka stockade, and even the development of democracy and self-government in which we are relatively so advanced, that we have more chance of achieving good government and justice than has the rest of the world.

The great feature of Australia and its history is the land, as in all countries. There was at the beginning in all countries, but perhaps more particularly in the United States and Australia, an unlimited supply of free land, and our history of poverty in Australia consists in its essence of an artificial and legally contrived drying-up of this free land during the first two centuries to 1988. The land, of course, is physically still here in abundance, but it is no longer freely and equally available to the people, as it would be if the Georgist proposals were adopted. As soon as the drying-up process commenced with the introduction of the English system of land-ownership the land began to have a price, which has continued and increased ever since. This is only another way of saying that the people have been disinherited, as in England. Throughout Australia, and particularly in Sydney, the price is now colossal. The best residential sites cost millions, while the industrial and commercial sites cost billions. Most Australians, even if profitably employed, cannot now afford to buy a home or home site, as they nearly all could do until very recently. The origin of our poverty is plain, and when we reverse it by collecting all site-rent for public revenue the price of land will disappear, together with poverty and unemployment, and we shall be a free people.


The beginnings

Captain James Cook took possession of, or "appropriated," Australia in 1770. In 1788 Captain Arthur Phillip, the first colonial governor, launched the first military and convict colony at Botany Bay, and it continued as a colony until 1850, when it became a self-governing colony with its six States.

From the first the land was looked on through English eyes. It was manipulated by the governing English and Australian authorities in the interests of the privileged classes so as to deprive the unprivileged classes, whom Marx called the proletariat, of the rights in and access to the land, which Marx said was the real cause of their exploitation. In Australia, as in England, the people were disinherited, though perhaps less so than in England. Benjamin Disraeli, in his novel, Sybil, spoke of England as two nations, the privileged and the unprivileged. Similarly in Australia we are two nations. I do not mean the whites and the blacks, but those who pocket the rents of Australian land to a substantial degree and those who are permitted to work the land and to produce Australia's wealth, and to pay for the privilege. We have our few billionaires, and our millions of paupers living in charity.


Poverty by manipulation

The manipulation, by English governments and our own privileged class, of the land-laws of Australia constituted our Australian Broken Trust (to use Edgar Buck's phrase), and it constitutes a shameless record. You will remember that I said earlier that Richard Cobden described English poverty and starvation as due to English laws. Similarly our manipulated land-laws of Australia have created our poverty and disinheritance. After we became self-governing our parliaments and governments have continued the process.

In Australia we have not experienced the horrors and savagery of India, Africa or New Zealand under colonial rule. But at bottom our history has been very similar, the chief similarity being the ignorance and apathy of the people, who spend much public money on relieving poverty without tackling its causes.


Our earlier history

At the beginning the ordinary Australian people endured great hardship and scarcity. There was semi-starvation for almost everybody, and there was the degradation and brutality of the convict system. But this gradually improved as free settlers arrived, along with more soldiers and convicts, until 1850. Eleven free settlers arrived in 1793, attracted by free passages, free grants of land, free convict labour, free tools and free stores for ten years. In 1805 more free settlers arrived, bringing some capital of their own, and receiving free grants of land. More and more free grants were made. Phillip's early instructions from London were to make free grants to freed convicts so that they could grow food which was desperately needed, and many such grants were made Later, many prominent citizens received free grants, presumably because of their merits, including the notorious John MacArthur (10,000 acres in one grant alone), the Rev. Richard Johnson, the first chaplain (260 acres), Dr. William Redfern (3,100 acres in all), and William Balmain (1,247 acres in all).

Phillip left for England in 1792, and during the interregnum the military officers, known as the New South Wales Corps, ruled the colony. They made hay for themselves while the sun shone; among the many benefits they conferred on themselves were a total of 15,000 acres between them.

The areas of the earliest grants are, of course, now the most valuable lands in Australia, though the grantees mostly sold them quickly. There are many stories about them, including the one about Burdekin House in Macquarie Street, Sydney. The grantee sold the block to a visiting sailor for a bottle of rum, and the sailor left Sydney and forgot all about it. But a long time afterwards he returned, found the receipt, searched for the block, and found it with a handsome building standing on it, built by someone who had no title to the land. The sailor took possession, and no doubt made a handsome profit from the rising prices.

There was, of course, nothing wrong with the grants themselves, though they were not made in a systematic way. They were just and necessary. The private, exclusive possession of land is essential to civilization. The great thing wrong with them was the failure to impose just conditions, in particular the payment of the economic rent to the community, an idea unknown to the public at that time.

Very strangely, however, there were some early quit-rents and peppercorn rents, which were quickly forgotten and abandoned. Somebody must have known something of English tradition.

So the grantees became regarded as owners, as they still are, and not as tenants. In consequence, taxation was imposed from the beginning, and has increased spectacularly ever since. Our defective land-grants, coupled with our heavy taxation and debts, have made us two nations, the rich and the poor.


More on the land-grants

In the early days of the colony the administration was performed by the Colonial Office in London, the Department of the Minister of State for the Colonies, an enormous department. Administering India alone was an enormous activity, in spite of the East India Company. All orders from London to Sydney were by sailing-ship, slow and infrequent. The Colonial Office, of course, saw everything through upper-class English eyes. If it ever occurred to them that Australians should have free and equal access to Australian land, that idea was dismissed as revolutionary and dangerous. We must remember that the ruling class in Britain were at this time very much afraid of both the French and American revolutions, and that Britain was seething with rebellion and discontent. The government's policy was military, repressive and savage, and the severity of the criminal law became extreme. Even petty crimes were punished by execution or transportation to the colonies. At the end of the 18th and the beginning of the 19th centuries England was reduced to its lowest level of degradation, pauperism and suffering, as witness the Peterloo massacre, the Chartist uprisings and Shelley's poems. Even though rebellion and revolution were commonplace in English history they were to be repressed at all cost.

The Ministers of State for the Colonies saw the land of Australia as the natural property of the English privileged classes. This reached its peak with the famous Edward Gibbon Wakefield, who was not a Minister but was apparently the most influential person in colonial affairs. His plan was to introduce in the colonies the English aristocractic land-owning system. Accordingly; in 1825, free grants of land were discontinued, after over three million acres had been handed out. All grants were henceforth to be by way of sale, at prices which only the rich could afford. Thus the working classes were kept land-less and a constant source of cheap labour in subordination to the landowning class.

The following is an abbreviated extract from A Letter from Sydney, really written by Wakefield, published by A. W. Jose in his History of Australia: "New South Wales was no place for a gentleman. The refinements of English life could not exist there, for no there was no leisured class, and of free servants there were none. A labourer might work for you for a year or two after arriving from England, but he would be sure to save money out of his wages and buy land with it, for land (said the letter) was much too easily got in New South Wales, and then the refined master would find himself without a servant and would have to work for his own living. This produced a new kind of society, and not a good kind. All the enumerated evils arose from the cheapness of land; so make land dear. Then the labourer would remain a labourer, happy and contented, earning his master's living as well as his own, and the master would have time to read and converse on intellectual matters with his equally leisured neighbors. Therefore sell land at a high price, use the money thus obtained to bring out emigrant labourers, and take care to bring out only as many as would be wanted to cultivate the land sold. So everybody would be happy, and the poor would never lack employment."

An abundant supply of free and landless labour was thus guaranteed, and has persisted, with fluctuations, ever since. William Charles Wentworth and some others even hoped that there would be a House of Lords in Australia, in which they would sit. Although the Australian people, with rising self-government, soon threw off Wentworth's ideas and became (within limits) firmly democratic, the English ideas prevailed for some time and are still quite influential in Australia.

Wakefield's ideas were also tried very early in South Australia, with disastrous results. That State became a hotbed of land speculation and was soon bankrupt, from which it had to be sternly rescued by the new governor, Sir George Grey, who both in New Zealand and South Australia was a distinguished predecessor and a friend of Henry George, and who ranks with Stamford Raffles of Singapore as a brilliant administrator and ruler and has left his mark on posterity for the benefit of the people.

The grants of land by way of sale were adopted throughout Australia and now every State has its Department of Lands which issues new grants and grants leases under the Crown Lands Acts. All city and town lands, and most of the country lands of any value, have passed into private ownership in fee simple, from which most of the great fortunes have sprung, though a certain number of the great fortunes have sprung from leasehold grants. The great majority of Australians own no land. Although we have the highest proportion of home-ownership in the world, this is changing back into landlessness because of the rapidly increasing land prices. We are slipping back into poverty amidst plenty -- the two nations of which Disraeli spoke.

Australia has seen great development in both town and country, and in spite of our unemployment, inflation and debt, Wakefield would be glad to know that our amenities have increased to an almost fantastic extent, so that our standard of living is very high and there are innumerable places in Australia fit for a gentleman. We have strong industry, universities and colleges and schools.


Our land titles

There is still a large area of Crown land in Australia, but most of it is waterless desert. If ever water is brought into the desert it will blossom like the rose and become an immense source of wealth, and unless we change our public revenue system it will soon pass into the hands of the wealthy few. But our future is more hopeful than in most countries. All we need to do is to leave the land-titles unchanged and collect from every landholder the proper economic rent of his holding, and so abolish as soon as practicable our huge taxes and debts.

Our prospects and our future

I must quickly pass over a picturesque period of Australian history -- the squatters, the gold rush and the Eureka Stockade. It made no substantial alternations, but it developed in Australia a favourable feeling towards the rights of the people in the land. The first Labour Party in the 1890s adopted a watered-down version of Henry George's land value tax as the first plank of its platform, although this was later swept away by socialism. There is some hope that the present wall of ignorance about economics will be broken down, because the private appropriation of the rent of Australia can be seen by anybody who has eyes to see to be the basic cause of poverty in Australia. In the meantime our governments gouge every penny they can out of the pockets of the producers, while they raise no objection to vast fortunes being extracted from the pockets of all producers by the owners of the choicest city and industrial sites. Our great Henry George Pearce has satirised the Australian National Anthem, the first verse of which reads:

Australian sons, let us rejoice
For we are young and free
We've golden soil and wealth for toil
Our home is girt by sea.

The satire runs as follows:

Australian sons, let us lament
For we're not free at all.
We've golden soil fenced off from toil
Girt by a tariff wall.

Public revenue in Australia

Australian governments -- federal, state and local -- collect a small amount of economic rent for public revenue, more perhaps by accident than by knowledgeable purpose.

(1) Three States - New South Wales, Queensland and Western Australia -- collect all their rates on land values, and in my opinion, although this terminology is very defective, the whole of what is collected is true economic rent while the amount collected is still very small. Two other States -- Victoria and South Australia -- partially do the same, and only Tasmania bases its rates entirely on land and improvements. As far as I can calculate, the total economic rent collected by rates in Australia is about $A2 billion, of which a considerable amount is used to pay for Council services and not for actual local government.

(2) Every State in Australia has a land tax on land value, but it is very much watered down and emasculated by exemptions and graduations. As Richard Braddock has taken this as the subject of his paper for this conference, I leave it to him.

(3) The total public revenue received by State governments from leases of Crown lands, interest on Conditional Purchases, and Forestry, seems to be about $A70 million.

Thus, out of a total of $A170 billion, or probably more, received per annum by Australian governments, probably not more than $A4 billion is collected from economic rent. In my opinion, economic rent in Australia amounts to at least $A70 to $A1OO billions.

All the figures quoted are very tentative, and so are the taxes on economic rent collected by income tax and in other ways. These indirect taxes on rent are very large, and prevent the whole community from being bled dry from the misappropriation of economic rent.


Our future

Our future in Australia is neither very hopeful nor completely hopeless. A much more substantial and more effective educational effort is needed. Much of the efforts of many dedicated and talented Georgists in Australia is directed to the converted, but we have had some good successes. Among our most brilliant and talented Georgists have been Max Hirsch and Sir Joseph Carruthers, to mention only two out of the many. One great Australian who deserves special mention and who did not belong to the organised Georgist movement was Sir Samuel Griffith, who attempted to introduce into the Queensland Parliament an actual enactment of the Georgist philosophy and proposals.

My final mention must be the Walsh Bequest Foundation in the Macquarie University in Sydney. Mr. Richard Braddock, who is attending and will be a speaker at this conference, administers the Foundation, and will, I am sure, be glad to tell us about it.

Poverty in Australia is a grim reality. We are endeavoring to eradicate it, in cooperation with Georgists around the world.