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SCI LIBRARY

Have We Outgrown Reform?

Glenn E. Hoover



[Reprinted from the Henry George News, August, 1957]


Societies, like individuals, are a bit moody. At some times they are more receptive to reform proposals than at other times, but the need to adjust to changing conditions and concepts of rights and duties is ever present. Any society that is incapable of reforming itself, or unwilling to make the effort, is marked for revolution or retrogression or both.

Horace M. Kallen, then of the New School for Social Research, in an article on "Reformism" in the Encyclopedia of the Social Sciences, limited the term reformer to those who believe that all social problems can be solved by "some one specific individual doctrine or measure. He cited prohibitionists and single taxers as examples.

By now every American should know that neither Henry George nor those who honor him have ever claimed that his economic program would core all our social ills. It was a practical three-point program directed toward the social appropriation of the socially created value of land, complete freedom of domestic and foreign trade, and preservation of the free enterprise system.

Free trade and free enterprise are already widely accepted as reasonable proposals. Ill-informed persons are more likely to think of us as dreamers because of our conviction that the earth is the common heritage of those who live upon it. This is based on the two premises that land is a free gift of nature and that its value is due to the growth of the community around it, rather than to any efforts put forth by landowners. These are self-evident truths and if any of us have led others to believe that we credited George with being the first to discover them, we have done him and our cause a regrettable disservice.

We sometimes make the mistake of assuming that academic economists reject these premises, but I must disappoint you. Most of them will grasp a truth as quickly, and hold to it as firmly, as any of us. Their disagreement with George has to do mainly with the right of society to take from existing landowners the full value of their land without offering at least partial compensation. This is an ethical question on which George's followers themselves are divided. The economic premises on which the program is based, however, have been accepted by many university economists in this and other countries.

Our age has lost interest in some proposed reforms, but it may be that land value taxation was never more timely than now. All around us land values are rising rapidly with the rapid increase in population. In almost every state, open land is being transformed into home sites for an unprecedented number of new families, while older families are fleeing to Suburbia. More people are aware, therefore, that it is the increase in their number that has raised the value of land.

The tremendous rise in our tax burden is another factor that disposes people to favor the increased taxation of land values. More of us are now aware that taxes on the products of labor, whether goods or services, are ultimately paid by the consumers. More of us also know that increased taxes on land values would not increase the prices of consumer goods one penny. This is taught in every economics class in the land.

A third factor now working for us is the general concern over the physical condition of our cities, best illustrated perhaps, by our notion of the slum problem. Until the past decade most Americans thought of slums as something peculiar to New York, Chicago, Philadelphia or Boston, but of no immediate concern to the rest of the American people. They now find slums, not only in other cities but in the rural communities. The countryside, so fabled in song and story, is infected with migratory labor camps, shack towns, Tobacco Roads, and, I regret to say, something known during the depression as "Hoovervilles."

It has been even more of a shock to learn that there are business slums in cities where the business districts are becoming older, shabbier and less accessible. New centers are springing up like mushrooms after a rain, with resulting problems that are bedeviling all of us, including the average citizen who rightly suspects that he will have to pay most of the cost of the cure, if indeed a cure can be found.

However slum properties are defined, it is agreed that they are under-improved as compared with non-slum properties which serve the same general purpose. For instance, where the value of well-kept apartment houses of a given size is roughly equal to the value of the land on which they are built, a slummy tenement building of the same size will be valued at considerably less than the land it occupies. It follows, therefore, that if the general property tax is shifted from improvements to land values, the owners of the slum properties may find that their taxes are increased, while the taxes of others will be decreased.

I am convinced that wide-spread interest in the slum problem offers us entrance into minds that we have thus far never been able to reach. Some cities are condemning and clearing certain slum areas, and building housing units on them. This puts government into the business of owning and managing residential property. Public housing is common in Europe, particularly in Great Britain, and is all but universal in the Communist countries. Experience indicates that public housing is a very imperfect solution of the slum problem.

It is our privilege and duty therefore to point out to the enemies of slums that there is a better way. Instead of accepting public housing, or relying on the police power to enforce building codes, we should make the ownership of slum properties unprofitable. Tell your friends that as long as money can be made by the ownership of such properties we will have slums. If, however, we take the taxes off buildings and put them on lands, it will be unprofitable for anyone to own land that is not as well improved as the average property in his city. Whatever else the owners of slum properties may be, they are not fools. By making these areas unprofitable we d9om them to extinction, and land value taxation is the method that will do it.

The cause of land value taxation since George's death has been carried on by those who relied on the unspectacular but relentless process of education. For that, the best evidence is this 25th anniversary of the Henry George School. By stressing an appeal to reason rather than the emotions, we are, I believe, on the right road. Land value taxation, like free trade and free enterprise, has already won many adherents among thoughtful and influential citizens. However, each man must learn of these things for himself, and as our population is continually changing, the educational process must be a continuing one. Our instincts are transmitted by inheritance, but knowledge, alas, is the reward of hard work by the individuals who acquire it. The cerebro-nervous system is, at best, an imperfect learning device, and in some it is almost worthless.

While ours is an eminently practical proposal, in stressing its common-sense practicality I do not want to disparage the idealism that is needed to support it. No important reform can ever be achieved unless some of its advocates devote to the reform more than they can ever hope to gain from its final adoption. There is a kind of madness displayed by clear-headed, devoted reformers which is the first requisite of all progress in human affairs. If we are to leave to our youth a better world than our ancestors left to us, it will be because some few will make sacrifices for the many. I rejoice that the West, which produced "The Prophet of San Francisco" has contributed its full share of these reformers.