Socialism versus Georgeism
The Critics Criticized
Jack Schwartzman
[Reprinted from Land and Freedom, March-April
1942]
This article will be devoted to Socialist criticisms of Georgeism.
Our first objector will be Rev. F. M. Sprague, an intelligent,
warm-hearted, talented writer, who, in "Socialism from Genesis to
Revelation" (Lee and Shephard, 1893), criticizes George as
follows:
- It is not true that all the earnings of capital, save the
meager returns obtained from the poorest land on which it is
employed, are absorbed by rent. Nor is it true that rent absorbs
all the fruits of labor above the margin of cultivation. Vast
fortunes are piled up by capitalists where rent is an
insignificant factor. Capital is everywhere, if not facile
primus, a particeps criminis in this absorption.
- George predicates his theory on Ricardo's Law of Rent. This law
is incorrect for the following reasons:
(a) Ricardo says that the value of an object is regulated by the
quantity of labor bestowed on its production on land that pays no
rent. Such assertion is no longer true.
(b) It is not true that "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," that is, on
land which can be had for nothing. How can it be true in a
community where there is no such land? Most men live in such
communities. Rent values are fixed, not by what the land will
produce, or by any other one factor, but by the progress of
society.
(c) Rent is not now based on "the original and
indestructible powers of the soil." It is not based on
agricultural lands or their fertility at all. There is no
available land that can be had for nothing.
(d) It is not true that wages are fixed by the margin of
cultivation. They are determined by the total produce of the
worker, and today such wages are stolen by the capitalist, who
appropriates the surplus value over and above the worker's means
of subsistence.
(e) It is not true that interest is fixed by the margin of
cultivation. It is all the way from nothing to 500 per cent. Today
it is one rate, tomorrow another. The law that governs interest is
about as fixed as the law that governs the course of a butterfly.
(f) "Rent," says Blackstone, "is a certain profit
issuing out of lands and tenements corporeal." Rent, then,
is. not based on the soil alone, as Ricardo claims, but pertains
to buildings and other fixtures which have become blended with the
soil.
(g) Political economy has been too largely a system of a
priori speculations that contradict the most palpable facts.
The question of how rent arises has no more to do with practical
economics of today" than the question of how sin got into the
world has to do with practical Christianity.
- Land is not something different front capital. When an
individual buys both, land stands related to industry in the same
way as capital. Therefore, there being but two factors of
production, labor and capital, there are only two factors of
distribution: wages and interest, When the latter rises, the
former fall. Therefore, George goes only halfway in his proposals
to confiscate rent.
- The plan proposed by George -- that government should take
forcible possession, of all land by confiscating rent, thus
robbing multitudes of landowners who have purchased and paid for
their land, frequently with the savings of a lifetime of toil --
is so repugnant to reason, so vicious in principle, it so outrages
every sense of justice, that we are left to wonder how a head so
dear and a heart so humane could suggest a measure so anarchistic
and villainous. A famous-objection to George is posed by George
Bernard Shaw in both "Fabian Essays in Socialism"
(Walter Scott Co., 1889) and "The Intelligent Woman's Guide
to Socialism and Capitalism" (Brentano, 1928) in the
following way :
- George's omission to consider what the State should do with a
national rent after it had taken it into the public treasury
stopped him on the threshold of Socialism. It will be found in the
future as in the past that governments will raise money only
because they want it for specific purposes, and not on a
priori demonstrations that they have a right to it. What will
the rent, lying idle in the national treasury, accomplish? At
least, in the past, part of it went to the unemployed as charity;
but under Georgeism, the poor people will be deprived of it.
Another argument is voiced by Norman Thomas in "The Choice
Before Us" (Macmillan, 1934) :
- The single tax is insufficient as a cure to our agricultural
problem, since it does not take into consideration what the fanner
should buy and sell, nor makes any provision for either foreign or
domestic trade, nor does it touch the farm debt.
The following are my replies :
(1)
What the author takes for the earnings of "capital" are in
monopoly. It is a common error to confuse the two. Thus, public
utilities, tariff- and patent-protected industries, and huge landed
estates - are all erroneously covered under the term "capital."
The only times capital actually does make these vast fortunes is when
it is backed by the private ownership of land. In such case, rent is
the hidden factor,
facile primus, and not to he belittled.
Rest appears to be an insignificant factor only in marginal
and sub-marginal lands. Even there, however, rent (appearing also in
the guise of mortgage interest) absorbs a great deal of the produce.
(In the next article I will refute this point statistically and in
greater detail. For the present, I again point to Gustavus Meyers' "History
of the Great American Fortunes.")
(2)
(a) Neither George nor his followers believe that the value of an
object is determined by the margin of production; therefore,
attributing such statements to George is a misinterpretation of fact.
(b) George does not mean by "produce" a commodity of a kind
similar to the one produced on marginal land. He means
total production, which the reverend author calls "the
progress of society." If New York collects more rent than some
marginal wheatland, it is not because New York produces more wheat
(since it produces none), but because its total is so much
greater than the produce at the margin.
(c) Even if all parts of the soil are owned by a few individuals, a
person will be a marginal worker by using the free streets and
highways for production. Peddlers, salesmen, and bootblacks are
marginal workers.
NOR is it true that "there is no available land that can be had
for nothing." According to League of Nations statistics, the
world is very thinly populated, at a density of only 38.4 persons per
square mile. While the best lands have been appropriated through
private ownership, there are vast stretches of unused and unclaimed
soft on this earth. And water, being part of land in the economic
sense, constitutes in many parts of the world a margin of production.
(d) If wages are determined by the "total produce," how is
rent determined ? So much more is claimed as rent on superior lands
out of the total produce than on inferior lands -- the balance being
left for wages -- that it is difficult to see how the author can brush
aside this factor. When capital assists labor, part of the produce is
paid as interest, and the balance is wages. True, capital does not "exploit"
labor by robbing the "surplus value." That would be true
only if capital added nothing to the total produce. But capital can
obtain only that to which it is entitled by its part in production.
(e) Because interest varies from day to day no more disproves the Law
of Interest than does the changing number of falling bodies disprove
the Law of Gravity. Natural laws always remain fixed; their
manifestations alone vary. Wages vary as well, yet the critic accepts
a Law of Wages!
(f) The fact that Blackstone and his followers combine interest and
rent in one definition does no more change the function of each than
would the grouping of the sun and the moon under the name "sun"
change their respective functions. (For a more detailed discussion of
this particular subject, see my "Rent in Jurisprudence,"
Land and Freedom, March-April 1940.)
(g) "Practical" solutions can no more cure our social ills
than can "practical" medication cure cancer. We must get
down to the root of the problem itself, which is: Why are wages low?
The question of how rent arises does indeed have much to do with the
answer, for It also involves the rise and fall of wages.
(3)
Merely because an individual happens to "own" land and
capital does not obliterate the natural differences between the two
any more than does the "ownership" of slaves and capital
make the former part of the latter. Land is all the universe lying
outside of man and his products. Capital is man's own product, derived
from the use of the inexhaustible factor of land.
To state that Georgeism goes only half-way in its attempt to remedy
social ills, is to imply that appropriation of interest is also
necessary to the welfare of the community. However, there is a vital
difference between rent and interest. To appropriate the former is to
take that which is created by the total community; to take the latter
is to take the result of individual human effort. To collect rent is
to encourage production by opening all lands to use; to collect
interest is to discourage use of capital, and, therefore, production.
To collect rent is to augment national wealth; to collect interest is
to despoil individual earnings.
Capital does not "exploit" labor, since it cannot fix
labor's wages. The latter is determined by the margin. The fact that
capitalists and laborers fight one another does not any more prove "natural"
antagonism than does the fact that laborers fight among themselves
prove that labor "exploits" labor; Blind and fruitless
hatreds are the natural results of a sick and poverty-stricken world.
It is untrue that when interest rises, wages fall. Both rise or fall
together.
(4)
This is a peculiar argument for a Socialist. We have already
encountered and answered it when it was interposed by the defenders of
the status quo, but to find a fervent believer in Socialism employ it,
is amazing, to say the least. How can Socialists, who believe in
confiscating land and capital, be horrified at the confiscating of
land values alone?
(5)
Even if there be no need for rents already collected, at least the
collection would abolish speculation, and open productive lands to
labor. This is, after all, the prime objective of the single tax. Must
the fact that there is money lying idle in the treasury imply that the
State must turn Socialistic, and employ laborers with such money --
merely because it must be used? May it not remain in the treasury for
future use?
However, there would be no such thing as "idle" rent. The
rents would be used for social services, or might even be equally
divided among the populace. It is not necessary to specify what rent
is to be used for, once it is in the treasury. It is to be used for
whatever public services are needed.
As far as the poor and unemployed are concerned, there would be none
in a Georgeist society. If there were any, it would certainly be
regarded as a public service to provide for them.
(1)
It is true that the single tax does not take into consideration what
the farmer should buy or sell, nor with whom he should trade. It is
also strangely silent as to how he should breathe, what he should
wear, or how many children he should have. Such planning we may leave
to the Socialists; they are famous for their man-made "natural"
laws.
As to the farm debt, we take it for granted that it will vanish as a
national problem under Georgeism. With all social barriers removed, a
free society will leave private debts (if any) to the individual.
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