Henry George

Charles B. Fillebrown

[Reprinted from the book, Natural Taxation, published 1917.
Part I / The Authorities / Chapter 6]

Were we asked to state in a word what was Henry George's chief contribution to the movement which is the subject of our inquiry, we should answer that it was he who gave it a breath of life. His predecessors, Smith, Mill, Dove, Burgess, and Macdonnell, had already elucidated the general principles involved in the taxation of land values. But whereas before his time the question was one of little more than academic interest, since his time it has become with thousands of ardent men and women almost a religion. His followers have preached his gospel with missionary zeal and the so?called single tax and the name of Henry George have become known to the remotest corners of the globe. When the contributions of all the pioneers in this movement have been finally assessed, Henry George will be remembered as the profit, the reformer, the man with a mission.

His life was well calculated to develop the qualities of courage and self?reliance called for by such a career. He was born in Philadelphia in 1839. His formal school training terminated with a few months in the high school when he was less than 14 years old. He had, however, acquired taste for reading so that his real education suffered no interruption. Perhaps more important for the work he was to do than any book learning, was his education in the school of life. From the time he left the high school until his death in 1897 experiences were crowded into a span of years which might easily make him a hero of romance. They included a boy's realized dream of going to sea on a long voyage to India, learning the printer's trade, working his passage to California as a ship's steward on a lighthouse steamer, a runaway marriage with the lady of his heart, being without money and without prospects, and a struggle against poverty leading him at one time to the verge of desperation.

Then from the obscurity and privation of a journeyman printer and editor of a struggling radical paper, he emerges into the limelight of publicity. He beholds a vision, and conceives himself to have received to divine call to preach the new gospel. In his own words:

Like a flash it came upon 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. I turned back amidst quiet thought to the perceptions that then came to me and has been with me ever since.

Thus he describes his vision, and later, in these words, the consciousness of a divine call:

On the night in which I finished the final chapter of Progress and Poverty I felt that the talent entrusted to me had been accounted for. I felt more fully satisfied, more deeply grateful than if all the kingdoms of the earth had been laid at my feet.

His vision is first crystallized into Our Land and Land Policy, and later amplified and systematized in Progress and Poverty. The sale of the latter book (completed after one year in seven months of intense labor, and at first refused by all publishers) swells into the millions of copies. It is translated into all the principal languages of the globe. He becomes a mighty leader of the people whose eloquence holds multitudes spellbound, and he dies in the midst of a whirlwind campaign for mayor of the greatest city on the continent.

His parents were devoted church people and he himself, though he had said that he cared nothing for creeds, was of an intensely religious temperament. Some chapters of Progress and Poverty were written in a spirit of almost apocalyptic fervor, and it was this that gave it its wide currency. It was of a beatific vision to the outclassed and disinherited. Its title indicates the main thought. Science, discovery, invention, all that goes by the name of progress were advancing by leaps and bounds, yet the men who toil the hardest had small share in it. Poverty was their lot as it had then the lot of their ancestors before there had been any talk of progress. Why was it? Here was a man who had seen a vision and pointed away to deliverance. So the people read his works and joined in the new crusade against unjust power and privilege. And in their leader there was no pretense. He believed implicitly in himself and in his gospel.

All these facts must be understood in order to appreciate Progress and Poverty. It is, in a sense, a theological work as well as an economic textbook. It is on the one hand an attempt to reconcile the concept of a beneficent deity with the poverty and misery of mankind, and, on the other hand, to analyze the causes of this same poverty and misery by a coldly intellectual process, and to find the remedy therefor. It is to show that the cause lies not in the lack of God's bounty, but in man's blindness to natural law.

The proposition which is the subject of this volume is so closely associated with the name of Henry George that the average man never thinks of Henry George without thinking of the single tax and never thinks of the single tax without thinking of Henry George. Yet the doctrine of economic rent and the propriety of recognizing it as the normal revenue of every form of government has been taught before his time and often by much the same line of reasoning. Nevertheless it is by no accident that the honor of discovery is popularly attributed to Henry George. He it was who made the single tax a living issue. By the force of his logic, by his courage, and his eloquence, and above all, by the absolute sincerity of his conviction that he had made a discovery not only of a just and natural system of taxation but also of a system which was to usher in a social and economic millennium, he aroused and in different world and compelled it to listen to his message. His doctrine had come to him as a vision and he preached it with the absolute self?confidence of one of the Hebrew profits for telling the new Jerusalem. It was this that gave him his immense popularity with the masses. He held out to them the promise of deliverance from poverty.

The subjoined extracts from Henry George's work cover the purpose of this book. "Rent and the law of rent" is its text in essence. Those from Our Land and Land Policy, which was a distinct forerunner of Progress and Poverty mark the date of his real entrance into the economic arena as 1871 instead of us 1879. The chapters, "The Remedy" and "The Canons of Taxation," are those for which he is best known in the taxation field.


What we want is something which shall destroy the tendency to the aggregation of land, which shall break out present monopolization, and which shall prevent (by doing away with the temptation) future monopolization. And as arbitrary and restrictive laws are always difficult to enforce, we want a measure which shall be equal, uniform, and constant in its operation; a measure which will not restrict enterprise, which will not curtailed production, and which will not offend the natural sense of justice.

When our forty millions of people have to raise $800 million per year for public purposes we cannot have any difficulty in discovering such a remedy in the adjustment of taxation.


There is only one peculiarity in a land tax. With a few trifling exceptions of no practical importance, it is the only tax which must be paid by the holder of the thing being taxed. If we impose a tax upon money loaned, the lender will charge it to the borrower and the borrower must pay it, otherwise the money will be sent out of the country for investment, and if the borrower uses it in his business he, in his turn, must charged to his customers, or his business becomes unprofitable. If we impose a tax upon buildings, those who use them must pay it, as otherwise the erection of buildings becomes unprofitable and will cease until rents become a high enough to pay the regular profit on the cost of the building and the tax besides. But not so with land. Land is not an article of production. Its quantity is fixed. No matter how little you tax there will be no more of it; no matter how much you tax there will be no less. It can neither be removed nor made scarce by cessation of production. There is no possible way in which boulders of land can shift the tax upon the user.

And so while the effects of taxation upon all other things is to increase their value, and thus to make the consumer pay the tax -- the effect of a tax upon land is to reduce its value -- that is, it's selling price, as it reduces the profit of its ownership without reducing its supply. It will not, however, reduce its renting price. The same amount of rent will be paid; but a portion of it will now go to the state instead of to the landlord. And were we to impose upon land a tax equal to the whole annual profit of its ownership, land would be worth nothing and might in many cases be abandoned by its owners. But the users would still have to pay as much as before -- paying in taxes what they formerly paid as rent. And reversely, if we were to reduce or take off the taxes on land, the owner, not the user, would get the benefits. Rents would be no higher, but would leave more profit and the value of land would be more.


Here is a lot in the central part of San Francisco, which, irrespective of the buildings on upon it, is worth $100,000. What gives that value? Not what the owner has done, but the fact that 150,000 people have settled around it. This lot yields its owner $10,000 annually. Where does this $10,000, from? Evidently from the earnings of the workers of the community, for it can come from nowhere else.

Here is a lot on the outskirts. It is in the same condition in which nature left it. Intrinsically it is worth no more than when there were but 100 people at Yerba Buena Cove. Then it was worth nothing. Now that there are 150,000 people here and more coming, it is worth $3,000. That is, its owner can command $3000 worth of the labor or the wealth all of the community. What does he give for this? Nothing. The land was there before he was. Suppose a community like that of San Francisco, in which land, though in individual hands as now, has no value. Suppose, then, that all at once the land was given a value of, say, $150 million, which is about the present value of land in San Francisco. What would be the effect? That a tax, of which $150,000,000 is the capitalized value, would be levied upon the whole community for the benefit of a portion. There would be no more in the community than before, and no greater means of producing wealth. But of that wealth, beyond the share which they formerly had, the landowners would now command $150 million. That is, there would be $150 million less for other people who were not landholders.

And does not this consideration of the nature in effective land values go far to explain the puzzling fact that notwithstanding all the economies in production and distribution which a dense population admits, just as a community increases in population and wealth, so does the reward of the labor or decrease in poverty deepen?

One hundred men settle in a new place. Land has at first little or no value. The net result of their labor is divided pretty equally between them. Each one gets pretty nearly the full value of its contribution to the general stock. The community becomes 100,000. Land has become valuable, it's value perhaps aggregating as much as the value of all other property. The production of the community may now be more per capita for each individual who works, but before the division is made, one?half of the product must go to the landholders. How, then, can the laborer get so much as he could in the small community?

Now in this view of the matter -- considering land values as an indication of the appropriation (though doubtless the necessary appropriation) of the wealth of all; considering land rentals as a tax upon the labor of the community, is not a tax upon land values the most just and the most equal tax that can be levied. Should we not take that which rightfully belongs to the whole before we take that which rightfully belongs to the individual?


Consider the effects of the adoption of such a system:

The mere holder of land would be called on to pay just as much taxes as the user of land. The owner of a vacant city lot would have to pay as much for the privilege of keeping other people off its till he wanted to use it, as his neighbor who has a fine house upon his lot, and is the either using or deriving rent from it. The monopolizer of agricultural land would be taxed as much as though his land were covered with improvements, with crops, and with stock. Land prices would fall; land speculation would receive its death blow; land monopolization would no longer pay. Millions and millions of acres from which settlers are now shut out would be abandoned by their present owners, or sold to settlers on nominal terms. It is only in rare cases that it would pay anyone to get land before he wanted to use it, so that those who really wanted to use land would find it easy to get.


The term rent, in its economic sense -- that is, when used, as I am using it, to distinguish that part of the produce which accrues to the owners of land or other natural capabilities by virtue of their ownership -- differs in meaning from the word rent as commonly used. In some respects this economic meaning is narrower than the common meaning; in other respects it is wider.

It is narrower in this: In common speech, we apply the word rent to payments for the use of buildings, machinery, fixtures, etc., as well as to payments for the use of land or other natural capabilities; and in speaking of the rent of a house or the rent of a farm, we do not separate the price for the use of the improvements from the price for the use of the bare land. But in the economic meaning of rent, payments for the use of any of the products of human exertion are excluded, and of the lumped payments for the use of houses, farms, etc., only that part is rent which constitutes the consideration for the use of the land -- that part paid for the use of buildings or other improvements being properly interest, as it is a consideration for the use of capital.

It is wider in this: In common speech we speak of rent only when owner and user are distinct persons. But in the economic sense there is also rent where the same person is both owner and user. Where owner and user are thus the same person, whatever part of his income he might obtain by letting the land to another is rent, while the return for his labor and capital are that part of his income which they would yield him did he hire instead of owning the land. Rent is also expressed in a selling price. When land is purchased, the payment which is made for the ownership, or right to perpetual use, is rent commuted or capitalized. If I buy land for a small price and hold it until I can sell it for a large price, I have become rich, not by wages for my labor or by interest upon my capital, but by the increase of rent. Rent, in short, is the share in the wealth produced which the exclusive right to the use of natural capabilities gives to the owner. Wherever land has an exchange value there is rent in the economic meaning of the term. Wherever land having a value is used, either by owner or hirer there is rent actual; wherever it is not used, but still has a value, there is rent potential. It is this capacity of yielding rent which gives value to land. Until its ownership will confer some advantage, land has no value.[3]

Thus rent or land value does not arise from the productiveness or utility of land. It in no wise represents any help or advantage given to production, but simply the power of securing a part of the results of production. No matter what are its capabilities, land can yield no rent and have no value until some one is willing to give labor or the results of labor for the privilege of using it; and what any one will thus give depends not upon the capacity of the land, but upon its capacity as compared with that of land that can be had for nothing. I may have very rich land, but it will yield no rent and have no value so long as there is other land as good to be had without cost. But when this other land is appropriated, and the best land to be had for nothing is inferior, either in fertility, situation, or other quality, my land will begin to have a value and yield rent. And though the productiveness of my land may decrease, yet if the productiveness of the land to be had without charge decreases in greater proportion, the rent I can get, and consequently the value of my land, will steadily increase. Rent, in short, is the price of monopoly, arising from the reduction to individual ownership of natural elements which human exertion can neither produce nor increase.

If one man owned all the land accessible to any community, he could, of course, demand any price or condition for its use that he saw fit; and, as long as his ownership was acknowledged, the other members of the community would have but death or emigration as the alternative to submission to his terms. This has been the case in many communities; but in the modern form of society, the land, though generally reduced to individual ownership, is in the hands of too many different persons to permit the price which can be obtained for its use to be fixed by mere caprice or desire. While each individual owner tries to get all he can, there is a limit to what he can get, which constitutes the market price or market rent of the land, and which varies with different lands and at different times. The law, or relation, which, under these circumstances of free competition among all parties (the condition which in tracing out the principles of political economy is always to be assumed), determines what rent or price can be got by the owner, is styled the law of rent. This fixed with certainty, we have more than a starting point from which the laws which regulate wages and interest may be traced. For, as the distribution of wealth is a division, in ascertaining what fixes the share of the produce which goes as rent, we also ascertain what fixes the share which is left for wages, where there is no co-operation of capital; and what fixes the joint share left for wages. and interest, where capital does co-operate in production.

Fortunately, as to the law of rent there is no necessity for discussion. Authority here coincides with common sense,[4] and the accepted dictum of the current political economy has the self?evident character of a geometric axiom. This accepted law of rent, which John Stuart Mill denominates the pons asinorum of political economy, is sometimes styled "Ricardo's law of rent," from the fact that, although not the first to announce it, he first brought it prominently into notice.[5] It is:

The rent of land is determined by the excess of its produce over that which the same application can secure from the least productive land in use.

This law, which of course applies to land used for other purposes than agriculture, and to all natural agencies, such as mines, fisheries, etc., has been exhaustively explained and illustrated by all the leading economists since Ricardo. But its mere statement has all the force of a self-evident proposition, for it is clear that the effect of competition is to make the lowest reward for which labor and capital will engage in production, the highest that they can claim; and hence to enable the owner of more productive land to appropriate in rent all the return above that required to recompense labor and capital at the ordinary rate ?? that is to say, what they can obtain upon the least productive land in use, or at the least productive point, where, of course, no rent is paid.

Perhaps it may conduce to a fuller understanding of the law of rent to put it in this form: The ownership of a natural agent of production will give the power of appropriating so much of the wealth produced by the exertion of labor and capital upon it as exceeds the return which the same application of labor and capital could secure in the least productive occupation in which they freely engage.

This, however, amounts to precisely the same thing, for there is no occupation in which labor and capital can engage which does not require the use of land; and, furthermore, the cultivation or other use of land will always be carried to as low a point of remuneration, all things considered, as is freely accepted in any other pursuit. Suppose, for instance, a community in which part of the labor and capital is devoted to agriculture and part to manufactures. The poorest land cultivated yields an average return which we will call 20, and 20 therefore will be the average return to labor and capital, as well in manufactures as in agriculture. Suppose that from some permanent cause the return in manufactures is now reduced to 15. Clearly, the labor and capital engaged in manufactures will turn to agriculture; and the process will not stop until, either by the extension of cultivation to inferior lands or to inferior points on the same land, or by an increase in the relative value of manufactured products, owing to the diminution of production -- or, as a matter of fact, by both processes -- the yield to labor and capital in both pursuits has, all things considered, been brought again to the same level, so that whatever be the final point of productiveness at which manufactures are still carried on, whether it be 18 or 17 or 16, cultivation will also be extended to that point. And, thus, to say that rent will be the excess in productiveness over the yield at the margin, or lowest point, of cultivation, is the same thing as to say that it will be the excess of produce over what the same amount of labor and capital obtains in the least remunerative occupation.

The law of rent is, in fact, but a deduction from the law of competition, and amounts simply to the assertion that as wages and interest tend to a common level, all that part of the general production of wealth which exceeds what the labor and capital employed could have secured for themselves, if applied to the poorest natural agent in use, will go to landowners in the shape of rent. It rests, in the last analysis, upon the fundamental principle, which is to political economy what the attraction of gravitation is to physics -- that men will seek to gratify their desires with the least exertion.

This, then, is the law of rent. Although many standard treatises follow too much the example of Ricardo, who seems to view it merely in its relation to agriculture, and in several places speaks of manufactures yielding no rent (when, in truth, manufactures and exchange yield the highest rents, as is evinced by the greater value of land in manufacturing and commercial cities), thus hiding the full importance of the law, yet, ever since the time of Ricardo, the law itself has been clearly apprehended and fully recognized. But not so its corollaries. Plain as they are, the accepted doctrine of wages (backed and fortified not only as has been hitherto explained, but by considerations whose enormous weight will be seen when the logical conclusion toward which we are tending is reached) has hitherto prevented their recognition. Yet, is it not as plain as the simplest geometrical demonstration, that the corollary of the law of rent is the law of wages, where the division of the produce is simply between rent and wages; or the law of wages and interest taken together, where the division is into rent, wages, and interest? Stated reversely, the law of rent is necessarily the law of wages and interest taken together, for it is the assertion, that no matter what the production which results from the application of labor and capital, these two factors will receive in wages and interest only such part of the produce as they could have produced on land free to them without the payment of rent -- that is, the least productive land or point in use. For, if, of the produce, all over the amount which labor and capital could secure from land for which no rent is paid must go to land owners as rent, then all that can be claimed by labor and capital as wages and interest is the amount which they could have secured from land yielding no rent.

Or to put it in algebraic form:

As Produce = Rent + Wages + Interest,
Therefore, Produce ? Rent = Wages + Interest.

Thus wages and interest do not depend upon the produce of labor and capital, but upon what is left after rent is taken out; or, upon the produce which they could obtain without paying rent -- that is, from the poorest land in use. And hence, no matter what be the increase in productive power, if the increase in rent keeps pace with it, neither wages nor interest can increase.

The moment this simple relation is recognized, a flood of light streams in upon what was before inexplicable, and seemingly discordant facts range themselves under an obvious law. The increase of rent which goes on in progressive countries is at once seen to be the key which explains why wages and interest fail to increase with increase of productive power. For the wealth produced in every community is divided into two parts by what may be called the rent line, which is fixed by the margin of cultivation, or the return which labor and capital could obtain from such natural opportunities as are free to them without the payment of rent. From the part of the produce below this line wages and interest must be paid. All that is above goes to the owners of land. Thus, where the value of land is low, there may be a small production of wealth, and yet a high rate of wages and interest, as we see in new countries. And, where the value of land is high, there may be a very large production of wealth, and yet a low rate of wages and interest, as we see in old countries. And, where productive power increases, as it is increasing in all progressive countries, wages and interest will be affected, not by the increase, but by the manner in which rent is affected. If the value of land increases proportionately, all the increased production will be swallowed up by rent, and wages and interest will remain as before. If the value of land increases in greater ratio than productive power, rent will swallow up even more than the increase; and while the produce of labor and capital will be much larger, wages and interest will fall. It is only when the value of land fails to increase as rapidly as productive power, that wages and interest can increase with the increase of productive power. All this is exemplified in actual fact.


We have traced the want and suffering that everywhere prevail among the working classes, the recurring paroxysms of industrial depression, the scarcity of employment, the stagnation of capital, the tendency of wages to the starvation point, that exhibit themselves more and more strongly as material progress goes on, to the fact that the land on which and from which all must live is made the exclusive property of some.

We have seen that there is no possible remedy for these evils but the abolition of their cause; we have seen that private property in land has no warrant in justice, but stands condemned as the denial of natural right -- a subversion of the law of nature that as social development goes on must condemn the masses of men to a slavery the hardest and most degrading.

We have weighed every objection, and seen that neither on the ground of equity or expediency is there anything to deter us from making land common property by confiscating rent.

But a question of method remains. How shall we do it?

We should satisfy the law of justice, we should meet all economic requirements, by at one stroke abolishing all private titles, declaring all land public property, and letting it out to the highest bidders in lots to suit, under such conditions as would sacredly guard the private right to improvements.

Thus we should secure, in a more complex state of society, the same equality of rights that in a ruder state were secured by equal partitions of the soil, and by giving the use of the land to whoever could procure the most from it, we should secure the greatest production.

Such a plan, instead of being a wild, impracticable vagary, has (with the exception that he suggests compensation to the present holders of land -- undoubtedly a careless concession which he upon reflection would reconsider) been indorsed by no less eminent a thinker than Herbert Spencer, who (Social Statics, Chap. IX, Sec. 8) says of it:

"Such a doctrine is consistent with the highest state of civilization; may be carried out without involving a community of goods, and need cause no very serious revolution in existing arrangements. The change required would simply be a change of landlords. Separate ownership would merge into the joint-stock ownership of the public. Instead of being in the possession of individuals, the country would be held by the great corporate body -- society. Instead of leasing his acres from an isolated proprietor, the farmer would lease them from the nation. Instead of paying his rent to the agent of Sir John or his Grace, he would pay it to an agent or deputy agent of the community. Stewards would be public officials instead of private ones, and tenancy the only land tenure. A state of things so ordered would be in perfect harmony with the moral law. Under it all men would be equally landlords, all men would be alike free to become tenants.... Clearly, therefore, on such a system, the earth might be enclosed, occupied and cultivated, in entire subordination to the law of equal freedom."

But such a plan, though perfectly feasible, does not seem to me the best. Or rather I propose to accomplish the same thing in a simpler, easier, and quieter way, than that of formally confiscating all the land and formally letting it out to the highest bidders.

To do that would involve a needless shock to present customs and habits of thought -- which is to be avoided.

To do that would involve a needless extension of governmental machinery -- which is to be avoided. It is an axiom of statesmanship, which the successful founders of tyranny have understood and acted upon that great changes can best be brought about under old forms. We, who would free men, should heed the same truth. It is the natural method. When nature would make a higher type, she takes a lower one and develops it. This, also, is the law of social growth. Let us work by it. With the current we may glide fast and far. Against it, it is hard pulling and slow progress.

I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them continue to call it their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent.

Nor to take rent for public uses is it necessary that the State should bother with the letting of lands, and assume the chances of the favoritism, collusion, and corruption this might involve. It is not necessary that any new machinery should be created. The machinery already exists. Instead of extending it, all we have to do is to simplify and reduce it. By leaving to landowners a percentage of rent which would probably be much less than the cost and loss involved in attempting to rent lands through State agency, and by making use of this existing machinery, we may, without jar or shock, assert the common right to land by taking rent for public uses.

We already take some rent in taxation. We have only to make some changes in our modes of taxation to take it all.

What I, therefore, propose, as the simple yet sovereign remedy, which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crime, elevate morals, and taste, and intelligence, purify government and carry civilization to yet nobler heights, is -- to appropriate rent by taxation.

In this way the State may become the universal landlord without calling herself so, and without assuming a single new function. In form, the ownership of land would remain just as now. No owner of land need be dispossessed, and no restriction need be placed upon the amount of land any one could hold. For, rent being taken by the State in taxes, land, no matter in whose name it stood, or in what parcels it was held, would be really common property, and every member of the community would participate in the advantages of its ownership.

Now, insomuch as the taxation of rent, or land values, must necessarily be increased just as we abolish other taxes, we may put the proposition into practical form by proposing
To abolish all taxation save that upon land values.

As we have seen, the value of land is at the beginning of society nothing, but as society develops by the increase of population and the advance of the arts, it becomes greater and greater. In every civilized country, even the newest, the value of the land taken as a whole is sufficient to bear the entire expenses of government. In the better developed countries it is much more than sufficient. Hence it will not be enough merely to place all taxes upon the value of land. It will be necessary, where rent exceeds the present governmental revenues, commensurately to increase the amount demanded in taxation, and to continue this increase as society progresses and rent advances. But this is so natural and easy a matter, that it may be considered as involved, or at least understood, in the proposition to put all taxes on the value of land. That is the first step upon which the practical struggle must be made. When the hare is once caught and killed, cooking him will follow as a matter of course. When the common right to land is so far appreciated that all taxes are abolished save those which fall upon rent, there is no danger of much more than is necessary to induce them to collect the public revenues being left to individual landholders.

Experience has taught me (for I have been for some years endeavoring to popularize this proposition) that wherever the idea of concentrating all taxation upon land values finds lodgment sufficient to induce consideration, it invariably makes way, but there are few of the classes most to be benefited by it, who at first, or even for a long time afterward, see its full significance and power. It is difficult for workingmen to get over the idea that there is a real antagonism between capital and labor. It is difficult for small farmers and homestead owners to get over the idea that to put all taxes on the value of land would be unduly to tax them. It is difficult for both classes to get over the idea that to exempt capital from taxation would be to make the rich richer, and the poor poorer. These ideas spring from confused thought. But behind ignorance and prejudice there is a powerful interest, which has hitherto dominated literature, education, and opinion. A great wrong always dies hard, and the great wrong which in every civilized country condemns the masses of men to poverty and want, will not die without a bitter struggle.

I do not think the ideas of which I speak can be entertained by the reader who has followed me thus far; but inasmuch as any popular discussion must deal with the concrete, rather than the abstract, let me ask him to follow me somewhat further, that we may try the remedy I have proposed by the accepted canons of taxation. In doing so, many incidental bearings may be seen that otherwise might escape notice.


The best tax by which public revenues can be raised is evidently that which will closest conform to the following conditions:

(1) That it bear as lightly as possible upon production -- so as least to check the increase of the general fund from which taxes must be paid and the community maintained.

(2) That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payers -- so as to take from the people as little as possible in addition to what it yields the government.

(3) That it be certain -- so as to give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to lawbreaking and evasion on the part of the taxpayers.

(4) That it bear equally -- so as to give no citizen an advantage or put any at a disadvantage, as compared with others.

Let us consider what form of taxation best accords with these conditions. Whatever it be, that evidently will be the best mode in which the public revenues can be raised.


All taxes must evidently come from the produce of land and labor, since there is no other source of wealth than the union of human exertion with the material and forces of nature. But the manner in which equal amounts of taxation may be imposed may very differently affect the production of wealth. Taxation which lessens the reward of the producer necessarily lessens the incentive to production; taxation which is conditioned upon the act of production, or the use of any of the three factors of production, necessarily discourages production. Thus taxation which diminishes the earnings of the laborer or the returns of the capitalist tends to render the one less industrious and intelligent, the other less disposed to save and invest. Taxation which falls upon the processes of production interposes an artificial obstacle to the creation of wealth. Taxation which falls upon labor as it is exerted, wealth as it is used as capital, land as it is cultivated, will manifestly tend to discourage production much more powerfully than taxation to the same amount levied upon laborers, whether they work or play, upon wealth whether used productively or unproductively, or upon land whether cultivated or left waste.

The mode of taxation is, in fact, quite as important as the amount. As a small burden badly placed may distress a horse that could carry with ease a much larger one properly adjusted, so a people may be impoverished and their power of producing wealth destroyed by taxation, which, if levied in another way, could be borne with ease. A tax on date trees, imposed by Mohammed Ali, caused the Egyptian fellahs to cut down their trees; but a tax of twice the amount imposed on the land produced no such result. The tax of ten per cent. on all sales, imposed by the Duke of Alva in the Netherlands, would, had it been maintained, have all but stopped exchange while yielding but little revenue.

But we need not go abroad for illustrations. The production of wealth in the United States is largely lessened by taxation which bears upon its processes. Shipbuilding, in which we excelled, has been all but destroyed, so far as the foreign trade is concerned, and many branches of production and exchange seriously crippled, by taxes which divert industry from more to less productive forms.

This checking of production is in greater or less degree characteristic of most of the taxes by which the revenues of modern governments are raised. All taxes upon manufactures, all taxes upon commerce, all taxes upon capital, all taxes upon improvements, are of this kind. Their tendency is the same as that of Mohammed Ali's tax on date trees, though their effect may not be so clearly seen.

All such taxes have a tendency to reduce the production of wealth, and should, therefore, never be resorted to when it is possible to raise money by taxes which do not check production. This becomes possible as society develops and wealth accumulates. Taxes which fall upon ostentation would simply turn into the public treasury what otherwise would be wasted in vain show for the sake of show; and taxes upon wills and devises of the rich would probably have little effect in checking the desire for accumulation, which, after it has fairly got hold of a man, becomes a blind passion. But the great class of taxes from which revenue may be derived without interference with production are taxes upon monopolies -- for the profit of monopoly is in itself a tax levied upon production, and to tax it is simply to divert into the public coffers what production must in any event pay.


  1. The Works of Henry George, Vol. IX, chap. V, extracts from pp.101 to 112. Doubleday, Page & Co., 1898.
  2. George, Henry, Progress and Poverty, Book III, chap. II, Doubleday, Page & Co., 1912.
  3. In speaking of the value of land I use and shall use the words as referring to the value of the bare land. When I wish to speak of the value of land and improvements I shall use those words.
  4. I do not mean to say that the accepted law of rent has never been disputed. In all the nonsense that in the present disjointed condition of the science has been printed as political economy, it would be hard to find anything tht has not been disputed. But I mean to say that it has the sanction of all economic writes who are really to be regarded as authority. As John Stuart Mill says (Book II, Chap. XVI), "there are few persons who have refused teir assent to it, except from not having thoroughly understood it. The loose and inaccurate way in which it is often apprehended by those who affect to refute it is very remarkable." An observation which has received many later exemplicatins.
  5. According to McCulloch the law of rent was first state din a pamphlet by Dr. James Anderson of Edinburgh in 1777, and simultaneously in the beginning of this century by Sir Edward West, Mr. Malthus, and Mr. Ricardo.
  6. Buckle (Chap. 11, History of Civilization) recognizes the necessary relation between rent, interest, and wages, but evidently never worked it out.
  7. Progress and Poverty, Book VII. Chap. II.
  8. Progress and Poverty, Book VIII, Chap. III.

PREFACE Ch. 1 - Adam Smith
Ch. 2 - John Stuart Mill Ch. 3 - Patrick Edward Dove
Ch. 4 - Edwin Burgess Ch. 5 - John MacDonnell
Ch. 6 - Henry George Ch. 7 - Edward McGlynn
Ch. 8 - Thomas G. Shearman, Pt 1 Ch. 8 - Thomas G. Shearman, Pt 2
Ch. 9 - A Burdenless Tax to the Threefold to Support Upon Which the Single Tax Rests Ch. 10 - Land -- the Rent Concept -- the Property Concept
Ch. 11 - Taxation and Housing Ch. 12 - Thirty Years of Henry George
Ch. 13 - Henry George and the Economists Ch. 14 - The Professors and the Single Tax
Ch. 15 - A Catechism of Natural Taxation ...