National Dividend

Oscar B. Johannsen

[Reprinted from The Analyst, October, 1962]

One of the important questions which will arise if any society collects the full economic rent is to determine how it shall be distributed among the people.

Henry George said in Progress and Poverty: "This revenue ... could be applied to the common benefit … we could establish public baths, museums, libraries, gardens, lecture rooms, music and dancing halls, theatres, universities, technical schools, shooting galleries, play grounds, gymnasiums, etc." [p. 456]

But is this wise? It may well be that the way in which the rent is distributed could have a very important effect on whether or not the efficacious results of its communal collection were achieved.

If the funds were dispersed for such functions as those mentioned, what would it mean? First, it would mean the creation of a vast bureaucracy to carry them out. Second, it would lead to squabbles-as to how much should go to one function and how much to another, the fact that people would be constantly suggesting more and more functions which should be subsidized by the rent fund. Third, it would mean that the distribution of the fund would not be equitable to all, for some people would make little or no use of many of the functions, although part of their share of the rent would be applied to them. Fourth, with this fund at the disposal of the various bureaucracies, they would be in a position to give out important contracts, with all the dangers of corruption involved.

The result would appear to be that socialism might creep in through the back door. While at first, when such functions as libraries are conducted by means of the rent fund, there would be little harm done. Yet with the proliferation of functions, the danger would increase tremendously. Ultimately, the rent fund would not be big enough, and the result would be the taxation of wealth.

In other words, the State would become bigger and bigger, and without the people realizing it socialism would become the order of the day.

Well, how should the rent be distributed? This writer believes it should be distributed on a per capita basis. Whatever the rent fund is on say the first of January should be divided up equally among all those alive on that day -- men, women and children. This would be absolutely equitable, as then the people could do with the money as they chose. The could use it to become members of private libraries, to pay for their schooling at private schools. They could use it to pay the annual fee to use particularly private roads in their neighborhood if the businesses operating them set up such an arrangement. They could squander it if they wished.

There would be certain mechanical problems of determining just who is entitled in a particular area, but no greater than the problem in determining who is eligible to vote. If a man died his estate would get it that year. The rent belonging to immature children would go to their parents.

But no powerful State would arise from it, for there would be no bureaucracy to do for the people things which they could do better themselves. The only bureaucracy would be the one collecting and dispensing the rent fund. If this were done on the local level, just above the family, it could be controlled, as it would be under the eyes of the people themselves.

In the last analysis, the solution of this problem must answer two questions: Is it wise? Is it just? It seems to the writer that it is wise, for it makes the collection and disbursement of the rent fund as simple as possible and with the creation of the smallest amount of government to administer it. That it is just is obvious, for each person receiving the same 'dividend,' there could be no possibility of one getting more than another, such as would arise if the rent fund were used to produce such particular things as bathhouses and theatres.

It must always be remembered that man seeks to satisfy his desires with the least effort. Therefore, we must be careful that any machinery set up to collect and dispense the rent fund be such that it eliminates to the greatest degree possible the opportunity of some men utilizing it to serve their own ends. Distributing the rent fund via special functions makes it too easy for the Government to grow, makes it too easy for ambitious men to use it to gain power over their fellow men. And this is the very opposite of what George would have wished.