The Results Support the Theory

Aaron D. Shapiro

[Reprinted from the Henry George News, February, 1955]

The beginning of private ownership in land L had its roots in Greece and Rome, when the conquered land was parcelled out by the rulers to the free citizens only, leaving a large part of the population landless. Later the feudal system of land ownership existed in various forms in almost every country of the world-feudal lords usually considering the ownership of land as their divine right.

The institution of private property in land still exists, and today we have a condition where only a small portion of the people have legal possession of the soil and its resources. Thus the owners are charging the landless population a rental for existing on God's earth.

This brings us to a problem which demands the attention of every intelligent man and woman-how can the use of the bounties of Nature be best regulated for the benefit of society as a whole?

Among the land reform movements of today, "single tax" -- the philosophy expounded by Henry George, which advocates the taxing of land to its full rental value, with the abolition of all other forms of taxation, direct or indirect -- is the most pertinent one. This is based on the principle that the land belongs to "no man but to society at large.

The term "single tax" is somewhat misleading and does not indicate the real significance of the movement. We must always bear in mind that the taxing of the land value is only a method proposed to achieve a desired end, and as such it can be modified to meet varying conditions while still preserving the kernel.

Even Henry George himself, in a later book, sanctioned the levying of other taxes besides the land tax. In Our Land and Land Policy he suggests as an additional levy an inheritance tax which "should be a very heavy duty amounting to a considerable part of the whole estate," and also a license tax for the purpose of restriction.

The chief aim of the expounder was to give back to the people what he considered as belonging to them by natural rights. The unearned increment he maintained belonged to the community and to no one else. His ingeniously devised method of restoring land to the community was "to divert the rent, which flows now into the pockets of the landlords, into the common treasury of the people." He indicated that this could be easily accomplished by using the taxation power of the state to tax all economic rent into the treasury of society.

Such a tax, according to Ricardo and certain other economists, would fall wholly on the landowner and would not be shifted to any other class whether tenant, farmer, or consumer. Furthermore, such a tax would fall only on the original owner of the land, and would not be transmitted to the new purchaser, for the land would diminish in value by an amount equal to the capitalized value of the tax. Hence the new purchaser will pay the diminished rate.

A land value tax therefore, would, within a generation or two, be no tax at all. For the land would change hands a good many times during such a period and the last purchaser would only pay a small amount for the land itself, but he would have to assume the payments of the rental (in form of a tax) to the estate. The state would then continue to get its income from the rent which is now going to private landowners.

By eliminating the factor of land out of the three factors of production -- land, labor and capital -- the entire wealth produced will be divided between labor and capital. This will result in increased wages and interest. The author also proposed that no restrictions be put in the form of taxes, on industry or labor, so that perfect liberty would be enjoyed by them.

Some economists in criticizing the theory of Henry George claim that private property in land does not differ much from private ownership of other forms of capital, such as means of production. But that sort of reasoning only leads us a step closer to state socialism.

Private property can only apply to man's exertion to himself or the product of his labor. No code of ethics can justify exclusive right to private ownership of the earth.

Private property in land, Henry George declares, is an infringement on the "natural rights" of man. "What constitutes the rightful basis of property?" he asks. "Is it not, primarily, the right of a man to himself, to the use of his own powers, to the enjoyment of the fruits of his own exertions? As a man belongs to himself, so his labor, when put in concrete form, belongs to him." From this he further deduces that: "There can be to the ownership of anything no rightful title which is not derived from the title of the producer and does not rest upon the natural right of a man to himself. Nature acknowledges no ownership or control in man save as the result of exertion."

Whether or not private ownership of land is a wholesome institution (promoting the general welfare) can best be judged by considering results in countries and communities where they have been at least partially tested.

EDITOR'S NOTE IN 1955: Aaron D. Shapiro, during post graduate work at the University of California under Professor Elwood Mead in 1916, engaged in field investigation to study the speculation in land which was plaguing newcomers to the Coast, especially in the "California Traction Colonies" running from Sacramento to Stockton. In 1919 he visited Fairhope, Alabama for first hand information on the single tax colony. He also was attached to a commission headed by Dr. I. Wilkanski of Palestine, whose task it was to study colonization projects in the United States. Mr. Shapiro wrote the above article thirty years ago, but he is happy to note today that his "contention that single tax doctrine could best be applied in a new community or country, was substantiated in Palestine." During the past fifty years large parcels of land acquired by the Jewish National Fund passed in-to ownership by the State of Israel and cannot be bought or sold. This "acts as a deterrent to speculation in land," and, as Mr. Shapiro notes, the founders bf the Zionist movement were indeed fortunate in their adoption of the "Biblical concept of land ownership." This is of course not quite the same as the "single tax doctrine." TThe author until recently had never heard of the Henry George School. He is one of those who, having read Progress and Poverty, saw its significance and accepted its reasonableness.