Prosper Australia

It is suspected that the author is Mark Twain

Suppose I am the owner of an estate and 100 slaves, all the land about being held in the same way by people of the same class as myself. It is a profitable business, but there are many expenses and annoyances attached to it. I must keep up my supply of slaves either by buying or breeding them. I must pay an overseer to keep them continually to their work with a lash. I must keep them in a state of brutish ignorance (to the detriment of their efficiency), for fear they should learn their rights and their power, and become dangerous. I must tend them in sickness and when past work. And the slaves have all the vices and defects that slavery engenders; they have no self-respect or moral sense; they lie, they steal, they are lazy, shirking work whenever they dare; they do not care what mischief their carelessness occasions me so long as it is not found out; their labour is obtained by force, and given grudgingly; they have no heart in it. All these things worry me.

Flash!

Suddenly a brilliant idea strikes me. I reflect that there is no unoccupied land in the neighbourhood, so that if my labourers were free they would still have to look to me for work somehow. So one day I announce to them that they are all free, intimating at the same time I will be ready to employ as many as I may require on such terms as we may mutually and independently agree. What could be fairer? They are overjoyed, and falling on their knees, bless me as their benefactor. Then they go away and have a jollification, and next day come back to me to arrange the new terms.

They believe …

Most of them think they would like to have a piece of land and work it for themselves, and be their own masters. All they want is a few tools they have been accustomed to use, and some seed, and these they are ready to buy from me, undertaking to pay me with reasonable interest when the first crop comes in, offering the crop as security. As for their keep, they can easily earn that by working a few weeks on and off on any of the plantations, or by taking a job clearing or fencing, or such like. This will keep them going for the first year, and after that they will be better able to take care of themselves.

Hold on, now!

“But,” softly I observe, “you are going too fast. Your proposals about the tools and seed and your maintenance are all right enough, but the land, you remember, belongs to me. You cannot expect me to give you your liberty and my own land for nothing. That would not be reasonable, would it?” They agree it would not, and begin to propose terms. A fancies this bit of land, and B that. But it soon appears that I want this bit of land for my next year’s clearing, and that for my cows, and another is too close to my house and would interfere with my privacy, and another is thick forest or swamps, and would require too long and costly preparation for me who must have quick returns in order to live, and in short that there is no land suitable that I care to part with.

The benefactor

Still I am ready to do what I promised – “to employ as many as I may require, on such terms as we may mutually and independently agree.” But as I have now got to pay them wages instead of getting their work for nothing. I cannot of course employ 80 many of them. I can find work for ninety of them, however, and with these I am prepared to discuss terms.

At once a number volunteered their services at such wages as their imagination had been picturing to them. I tell the ninety whose demands are most reasonable to stand on one side. The remaining ten look blank, and seeing that since I won’t let them have any of the land, it is a question of hired employment or starvation, they offer to come for a little less than the others. I tell these now to stand aside, and ten others to stand out instead. These look blank now, and offer to work for less still, and so the “mutual and voluntary” settlement of terms proceeds.

But, meanwhile, I have been making a little calculation in my head, and have reckoned up what the cost of keeping a slave, with his food and clothes, and a trifle over to keep him contented, would come to, and I offer that. They won’t hear of it, but as I know they can’t help themselves, I say nothing, and presently first one and then another gives in, till I have got my ninety, and still there are ten left out, and very blank indeed they look. Whereupon, the terms being settled, I graciously announce that though I don’t really want any more men, still I am willing, in my benevolence, to take the ten, too, on the same terms, which they promptly accept, and again hail me as their benefactor, only not quite so rapturously as before.

Wage slaves?

So they all set to at the old work at the old place, and on the old terms, only a little differently administered; that is, that whereas I formerly supplied them with food, clothes, etc., direct from my stores, I now give them a weekly wage representing the value of those articles, which they w ill henceforth have to buy for themselves.

There is a difference, too, in some other respects, indicating a moral improvement in our relations. I can no longer curse and flog them. But then I don’t want to; it’s no longer necessary; the threat of dismissal is quite as effective, even more so; and much more pleasant for me.

I can no longer separate husband from wife, parent from child. But then again, I don’t want to. There would be no profit in it; leaving them their wives and children has the double advantage of making them more contented with their lot, and giving me greater power over them, for they have now got to keep these wives and children out of their own earnings.

My men are now as eager as ever to come to me to work as they formerly were to run away from work. I have neither to buy or breed them; and if any suddenly leave me, instead of letting loose the bloodhounds, I have merely to hold up a finger or advertise, and I have plenty of others offering to take their place. I am saved the expense and worry of incessant watching and driving. I have no sick to attend, or worn-out pensioners to maintain. If a man falls ill there is nothing but my good nature to prevent my turning him off at once; the whole affair is a purely commercial transaction - so much wages for so much work. The patriarchal relation of slave-owner and slave is gone, and no other has taken its place. When the man is worn out with long service I can turn him out with a clear business conscience, knowing that the State will see that he does not starve.

Instead of being forced to keep my men in brutish ignorance, I find public schools established at other people’s expense to stimulate their intelligence and improve their minds, to my great advantage, and their children compelled to attend these schools. The service I get, too, being now voluntarily rendered (or apparently so) is much improved in quality. In short, the arrangement pays me better in many ways.

I am capital and I employ people!

But I gain in other ways besides pecuniary benefit. I have lost the stigma of being a slave driver, and have, acquired instead the character of a man of energy and enterprise, of justice and benevolence. I am a “large employer of labour,” to whom the whole country, and the labourer especially, is greatly indebted, and people say, “See the power of capital! These poor labourers, having no capital, could not use the land if they had it, so this great and far-seeing man wisely refuses to let them have it, and keeps it all for himself, but by providing them with employment his capital saves them from pauperism, and enables him to build up the wealth of the country, and his own fortune together.”

Whereas it is not my capital that does any of these things. It is not my capital but the labourer’s toil that builds up my fortune and the wealth of the country. It is not my employment that keeps him from pauperism, but my monopoly of the land forcing him into my employment that keeps him on the brink of it. It is not want of capital that keeps the labourer from using the land, but my refusing him the use of the land that prevents him from acquiring capital. All the capital he wants to begin with is an axe and a spade, which a week’s earnings would buy him, and for his maintenance during the first year, and at any subsequent time, he could work for me or for others, turnabout, with his work on his own land. Henceforth with every year his capital would grow of itself, and his independence with it, and that this is no fancy sketch, anyone can see for himself by taking a trip into the country, where he will find well-to-do farmers who began with nothing but a spade and an axe (so to speak) and worked their way up in the manner described.

Enter the landlord

But now another thought strikes me. Instead of paying an overseer to work these men for me, I will make him pay me for the privilege of doing it. I will let the land as it stands to him or to another – to whomsoever will give the most for the billet. He shall be called my tenant instead of my overseer, but the things he shall do for me are essentially the same, only done by contract instead of for yearly pay. He, not I, shall find all the capital, take all the risk, and engage and supervise the men, paying me a lump sum, called rent, out of the proceeds of their toil, and make what he can for himself out of the surplus. The competition is as keen in its way for the land, among people of his class, as it is among the labourers for employment, only that as they are all possessed of some little means (else they could not compete) they are in no danger of immediate want, and can stand out for rather better terms than the labourers, who are forced by necessity to take what terms they can get. The minimum in each case amounts practically to a “mere living”, but the mere living they insist on is one of a rather higher standard than the labourers’; it means a rather more abundant supply and better quality of those little comforts which are next door to necessaries. It means, in short, a living of a kind to which people of that class are accustomed.

For a moderate reduction in my profits, then – a reduction equal to the tenant’s narrow margin of profit – I have all the toil and worry of management taken off my hands, and the risk too, for be the season good or bad, the rent is bound to be forthcoming, and I can sell him up to the last rag if he fails of the full amount, no matter for what reason; and my rent takes precedence of all other debts. All my capital is set free for investment elsewhere, and I am freed from the odium of a slave owner, notwithstanding that the men still toil for my enrichment as when they were slaves, and that I get more out of them than ever. If I wax rich while they toil from hand to mouth, and in depressed seasons find it hard to get work at all; it is not, to all appearances, my doing, but merely the force of circumstances, the law of nature, the state of the labour market – fine sounding names that hide the ugly reality.

If wages are forced down it is not I that do it; it is that greedy and merciless man the employer (my tenant) who does it. I am a lofty and superior being, dwelling apart and above such sordid considerations. I would never dream of grinding these poor labourers, not I! I have nothing to do with them at all; I only want my rent-and get it. Like the lilies of the field, I toil not, neither do I spin, and yet (so kind is Providence!) my daily bread (well buttered) comes to me of itself. Nay, people bid against each other for the privilege of finding it for me; and no one seems to realise that the comfortable income that falls to me like the refreshing dew is dew indeed; but it is the dew of sweat wrung from the labourers’ toil. It is the fruit of their labour which they ought to have; which they would have if I did not take it from them.

This sketch illustrates the fact that chattel slavery is not the only nor even the worst form of bondage. When the use of the earth – the sole source of our daily bread – is denied unless one pays a fellow creature for permission to use it, people are bereft of economic freedom. The only way to regain that freedom is to collect the rent of land instead of taxes for the public domain.

Once upon a time, labour leaders in the USA, the UK and Australia understood these facts. The labour movements of those countries were filled with people who fought for the principles of ‘the single tax’ on land at the turn of the twentieth century. But since then and they have gradually yielded to the forces of privilege and power daring no longer to come to grips with this fundamental question, lest they, too, become ridiculed. And so the world continues to wallow in this particular ignorance – and in its ensuing poverty and debt.

By Fred E. Foldvary, Senior Editor, The Progress Report

The daily cyberzine at http://www.progress.org/

A man was walking down a shopping street and came to a store window where there was a big drawing full of lines and squiggles. A sign by the drawing asked, “Can you see the picture?” All the man could see was a chaos of lines going every which way. He stared at it and tried to make out some kind of design, but it was all a jumble. Then he saw that some of the lines formed ears, and whiskers, and a tail. Suddenly he realised that there was a cat in the picture. Once he saw the cat, it was unmistakable. When he looked away and then looked back at the drawing, the cat was quite evident now.

The man then realised that the economy is like the cat. It seems to be a jumble of workers, consumers, enterprises, taxes, regulations, imports and exports, profits and losses - a chaos of all kinds of activities. Here are fine houses and shops full of goods, but yonder is poverty and slums. It doesn’t make any sense unless we understand the basic principles of economics. Once we have this understanding, the economy becomes clear - we see the cat instead of a jumble. We then know the cause of poverty and its remedy. But since most folks don’t see the cat, social policy just treats the symptoms without applying the remedies that would eliminate the problem.

What is this economics cat? It starts with the three factors or resource inputs of production: land, labour, and capital goods. Land includes all natural resources and opportunities. Labour is all human exertion in the production of wealth. Capital goods are tools (such as machines and buildings) used to produce wealth. The owners of land get rent, workers get wages, and the owners of capital goods get a capital return.

Picture an unpopulated island where we’re going to produce one good, corn, and there are ten grades of land. On the best land, we can grow ten bushels of corn per week; the second land grows nine bushels, and so on to the worst land that grows zero bushels. We’ll ignore capital goods at first. The first settlers go the best land. While there is free ten-bushel land, rent is zero, so wages are 10. When the 10-bushel land is all settled, immigrants go to the 9-bushel land.

Wages in the 9-bushel land equal 9 while free land is available. What then are wages in the 10-bushel land? They must also be 9, since labour is mobile. If you offer less, nobody will come, and if you offer a bit more than 9, everybody in the 9-bushel land will want to work for you. Competition among workers makes wages the same all over (we assume all workers are alike). So that extra bushel in the 10-bushel land, after paying 9 for labour, is rent.

That border line where the best free land is being settled is called the “margin of production.” When the margin moves to the 8- bushel land, wages drop to 8. Rent is now 1 on the 9-bushel land and 2 on the 10-bushel land. Do you see what the trend is? As the margin moves to less productive lands, wages are going down and rent is going up. We can also now see that wages are determined at the margin of production. That is the “law of wages.” The wage at the margin sets the wage for all lands. The production in the better lands left after paying wages goes to rent. That is the “law of rent.” If you understand the law of wages and the law of rent, you see the cat! To complete our cat story, suppose folks can get land to rent and sell for higher prices later rather than using it now. This land speculation will hog up lands and make the margin move further out than without speculation, lowering wages and raising rent even more.

Now we have good news and bad news. The good news is that when we put in the capital goods we first left out from the example above, the tools and technology increase the productivity of all the lands. If production doubles, rent doubles, and wages go up. Wages won’t double, because workers have to pay for the tools, but even if wages go up 50 percent, that’s good news, and why industrialised economies have a high standard of living. Also, high skills enable educated workers to have a wage premium above the basic wage level. The bad news is that the technology enables us to extend the margin to less productive land, which lowers wages again. So there is this constant race between technology raising wages and lower margins reducing wages.

It’s bad enough that a low margin sets the wage level at the poverty level, especially in countries with low technology and low skills. Government then taxes away a large chunk of those wages, which hurts those workers with higher wages. The result is a highly unequal distribution of income. Workers have the low wage set at the margin and reduced further by taxes, while the owners of land get all the extra production as rent, but pay less in taxes because of tax breaks to landowners. (Capital-goods returns boil down to wages and rents, because capital goods are ultimately produced using land and labour.)

Behold the cat! The margin at the least productive land sets low wages, and the rest goes to rent, resulting in inequality, with poverty for low-skilled workers. If we see the cat, the remedy is also clear: stop taxing workers, and let everybody share the rent. If we get public revenues from the rent instead of wages, the public benefits equally from the rent, while workers get the full product of their labour. And wages will be higher, too, because by collecting the rent, we eliminate land speculation, moving the margin up to more productive lands, which raises the wage level. The economy grows faster too, since the government no longer punishes enterprise and investment with taxes, so wages go up faster over time. We all become fat cats. Those who see the cat have a clear picture of how the economy works. They can see why we have social problems, and what the remedy is. Those who don’t see the cat keep trying treat the symptoms with welfare, but they never cure the economic disease. Others see the welfare as not curing anything, and think they can just get rid of the welfare. Only those who see the cat realise that the remedy is a shift of public revenue from labour to land so that we eliminate poverty and thus any need for the welfare state.

Do you see the cat?

A New Route to Social Equity: Henry George and the Science of Geonomics

Caspar Davis

Throughout the modern era there has been a near-constant struggle between the principles of social justice expressed by eighteenth century writers like Tom Paine and even Adam Smith, and the desire of the rich to monopolize both wealth and power. Paine and the French Physiocrats observed that land and natural resources were provided by God or nature for the use of all, and that nothing could be made or grown without access to them. They argued that because the land and natural resources were provided by Providence and not by any human act, equity demanded that their fruits be shared by all. To be sure, work and tools were required to grow crops or mine ore, and those who provide them should receive fair compensation. But the value provided by nature should not accrue to any individual.

Socialists focus on control of the means of production, but without access to land and its resources wealth and machinery would be worthless. No one can exist, let alone produce anything without a place to do it, and both materials and, increasingly, energy are needed for any serious production. Because of its unique character, the Classical economists (unlike their “neop-classical” counterparts) recognized Land (including all natural resources) as a distinct factor of production, together with Labour and Capital.

Henry George

Henry George (1839-1897), was the last of the great Classical economists. His first book, Progress and Poverty (1879), was the best-selling book in English to that date, save only the Bible. George wrote several other popular but substantial books, and also had an international reputation as a lecturer, speaking throughout the English-speaking world, from Australia to England. He greatly influenced philosophers and politicians from Leo Tolstoy and G. B. Shaw to Clarence Darrow, Sun Yat Sen and Winston Churchill, among many others.

Like Tom Paine, George drew a sharp distinction between land and capital. Capital, he said, was a subset of wealth, i.e. that part of wealth which is devoted to economic activity; to production, transportation, sales, or services provided for profit. Like labour, capital represents human effort and deserves fair recompense. Land, however, is another matter. It is produced by no person, and whoever uses it prevents others from doing so. Moreover, most of the economic value of land is created by society as a whole, not by the “owner”. Population growth creates demand for land and for resources, and population, together with public roads, pipelines, and utilities cause the value of land to rise even if the owner does nothing with it. Since the economic value of raw land and its natural resources results entirely from social action, that value should be shared by all and not accrue to any single “owner”. George said that this result could easily be accomplished by taxing away all or most of the “economic rent”— i.e. the rent that raw land or its resources would bring on the open market.

George added that society should collect the rent not only from land and natural resources, but also that accruing from special privileges such as patents and licenses like taxi licenses, radio and TV licenses, satellite orbits etc. which enable a few to profit from monopolies Everything beyond a fair return for the inventor or license holder’s time and ingenuity should accrue to society as a whole.

Neo-Classical Economics and the Appropriation of the Commons

George’s ideas were ridiculed by the new breed of academic “Neo-Classical” economists, who asserted that land and natural resources were merely subsets of capital, not qualitatively different from tools and factories. This doctrine represents a radical departure from Classical economics, and lies at the heart of “modern” or Neo-Classical economic theory. The private sequestration of land and other natural resources has become a fundamental dogma of the Neo-Classical faith.

Of course land holding is nothing new, nor was it in George’s day; but even now real estate is treated quite differently from other property. It has its own terminology and is governed by a discrete body of law. Even in England, the term “landowner” did not come into use until the 1600’s. The prior term was “landholder”. Unlike manufactured goods which are made by people and sold to others, so that their provenance can be traced to the maker, land tenure is rooted either in long habitation or more usually in violent theft—called conquest. The principal thief (‘king’ or ‘conqueror’) granted pieces of land to his followers who held ‘title’ to it from the thief-in-chief, the king. Unlike Labour, which is actual individual effort, or Capital, the title to which is rooted in the labour which gave it its form, title to Land is rooted in the private appropriation of a common resource, usually by force. Title to Land is almost invariably founded on the most recent theft to be legitimized by the local legal system.

It is not practical in modern society for most resources to be held in common. In practice, this usually leads to bureaucratic management which often benefits no one very much. True commons tend to suffer ‘The Tragedy of the Commons.’ Overuse or abuse benefits an abuser much more than it harms any individual user, so there is much more incentive to abuse than to prevent abuse, until it is too late. For example, if I put one more sheep on the common than it will adequately maintain, each person’s sheep will only be slightly less well nourished but I will have an extra sheep. This encourages others to also run more sheep, and soon the grass is gone.

Beginning with the Norman Conquest, much of England’s land was enclosed by those who rendered service to the king. Later on, those with the wealth and political power began to pass legislation legalizing their appropriation of the remaining commons (the ‘Enclosure’ movement). Nor did appropriation stop with the land. One after another, farmland, timber, hydrocarbons, minerals, fish, pollution and carbon sinks (such as air and water), plant and animal species and now even DNA sequences have been sequestered for private profit. Today, corporate scouts roam the planet looking for genetic material which might have commercial value, in order to patent it.

The privatization of public resources has been justified and applauded by the Neo-Classical economic priesthood, who claim that it creates a rising tide of prosperity that elevates all boats. This claim is repeated constantly, not only by economists and the business elite, but also by journalists and politicians. But no matter how large the crowds that admire the emperor’s fictional clothes, it does not change the fact that he is naked.

According to the Centre For Social Justice’s Growing Gap Report by Armine Yalnizyan, a Toronto Economist:, “The role of the transfer system (income supports from government) and tax system… provided remarkable stability in the distribution of incomes over the last generation. This stability is [now] deteriorating dramatically and rapidly: since 1994, the ratio of after-tax income between richest and poorest families has escalated to the highest point since 1973. The fastest change has been in the last year for which we have data, between 1995 and 1996… Governments have told us we can “grow our way to equity,” that the market will produce results that make everyone better off, but it’s becoming evident that inequality is growing in Canada despite economic growth.”

The inequity of ownership resulting from private sequestration of land is palpable in the statistics of land ownership, as is shown below:

(Data compiled by Alanna Hartzok)

In Arizona, California, Maine, Nevada, New Mexico and Oregon, one percent of the population owns over two-thirds of the land.

Nevertheless, there are real benefits to having a personal or family interest in land. How then can we reap the benefits of private use and enjoyment while maintaining the equity and sense of respect inherent in common ownership?

The Geonomic Solution

Henry George suggested that society should collect rent for the Land (as broadly defined) from those who command exclusive use of this common heritage. He recommended that the rent be used to replace existing taxes, which in those days were mainly tariffs and excise taxes, both of which tended to inhibit economic activity. Today, the principal taxes are income tax, payroll taxes and sales taxes, all of which impinge negatively on employment and economic activity, and which also tend to impact most heavily on people with lower incomes. They are also very hard to administer, requiring an army of accountants and tax collectors, and relatively easy to avoid or evade, creating an array of loopholes and exceptions, and a large “underground economy.”

1. A Georgist or Geonomic tax code, based on the taxation of land and natural resources, but not of improvements to the land, has the following effects, among others:
2. It reconciles common land and resource rights with private tenure, enabling society to collect the value accruing from its actions yet preserving the benefits of private ownership.
3. It enables the reduction or elimination of payroll taxes and taxes on labour and capital, by shifting the burden to land and natural resources.It reconciles equity and efficiency, which Neo-Classical economists and institutions like the IMF and the WTO claim must be traded off against one another. Land is immobile and it cannot be hidden. Surprisingly, the value of residential lots tends to vary more than the value of the buildings on them. Open assessment records would ensure fairness. Resource taxes would help to assign their true value to dwindling natural resources which are often sold for far less than their replacement would cost, and in many cases (due to subsidies) for less even than the true cost of recovering them. Even radical Neo-Conservatives like Milton Friedman, who is opposed to all taxes, has acknowledged that the land tax is the least harmful tax.
4. It can finance generous public services without driving away business or population and without stifling useful employment or taxing investment in real capital. Neither land nor resources are mobile. Those who would live or do business in a jurisdiction must use land to do so. At present, those who use land, whether to extract resources or build houses or business facilities, are often heavily subsidized. A land tax which recovered most of the economic rent would recover for the community the value created by the community.
5. It contains urban sprawl by encouraging the intensive development of urban land and by making the developers and owners of suburban land pay more of the true costs of providing them with roads and utilities, which are now heavily subsidized by the rest of the community. It is much less costly to provide public utilities to developments in or near the urban core than in outlying districts. Most North American cities have very low population density. Since World War II the tendency has been to abandon urban cores for car-dependent suburbs, whose wide streets and large lots serve little purpose other than to keep neighbours apart. The preference for them is based more on habit than convenience or reason. Higher densities can actually make neighbourhoods safer and more vibrant. Narrow streets and front porches encourage social contact and promote safety. Greater density makes neighbourhood coffee shops, stores and mini parks—as well as public transit— economically and socially viable. Lack of sprawl preserves the surrounding countryside for agriculture, green space, and parks.
6. It creates jobs without inflation or deficits. It is the only tax of any serious revenue potential that does not bear down on and suppress production and exchange. Unlike income and payroll taxes, it does not penalize work and employment. Unlike sales tax and GST it does not penalize production and trade. But it does assign their true value to natural resources and thereby offers a powerful incentive to husband and preserve them.

Geonomics meshes very comfortably with other tax shifting measures being advocated by many progressive economists and environmentalists. The general idea of green and equitable tax shifting is to stop taxing “goods” like employment, initiative, and economic activity and start taxing “bads” like carbon emissions and other pollutants, traffic congestion, speculative holding of vacant urban lots, and reckless use of common goods like fish, old growth forests, and water. An essential corollary is to stop the subsidizing of “bads” which is all too prevalent in modern society.

Jeffery Smith, the Portland-based founder of Geonomics, suggests that land taxes could not only fund necessary public services but also provide a "Geo-dividend," a basic income for everyone, as the Alaskan state oil royalty does for Alaskans.

The stated purpose of economic progress has always been to provide more goods with less effort, to provide greater leisure for people to pursue the arts and personal development. Today we have incalculably more total wealth and more efficient production than ever before, but we also have less balance. A few are immensely wealthy. But most working people work harder than ever just to stay afloat. Forty years ago, most families had only one member working outside the home. Today it usually takes two or more people working just to provide the basic necessities. Millions are unable to find even minimum wage work, and almost every day we hear of more mass layoffs and more deep wage cuts.

As Henry George said long ago, whoever is able to deny people access to the land is able to wring from them all but the barest means of subsistence. He can force them to work like slaves for less than the cost of maintaining slaves. Actual access to land is no longer practical for many people, but Geonomic taxes could recover the value of the land and other common resources for the good of all.

By Clyde Cameron, AO

Taken from a recent edition of the Progess magazine

Editor: I recently received a gracious letter from the Hon. Clyde Cameron A.O. in which he offers for publication a long letter he wrote to a Queensland academic researching the roots of the Aust. Labor Party. In it, Clyde lays out in meticulous detail how Labor’s first 24 Commonwealth Conferences (up to 1961) all reaffirmed the party’s commitment to Georgist principles of taxing the unimproved value of land.

Clyde has had a long and distinguished career with the Australian Labor Party, serving in the Federal Parliamentary Labor Party Shadow Cabinet from 1953-72. He was Federal Minister for Labor in the Whitlam Government from 1972-1974, Minister for Labour and Immigration (1974-75), and Minister for Science and Consumer Affairs (1975). In 1976 he was the Parliamentary Delegate to the UN General Assembly.

Here we pick up the more recent history of the Labor Party at its 25th Commonwealth Conference in 1963 where Clyde demonstrates, to the title of a booklet he wrote (available from our Hardware Lane office) “How Labor Lost Its Way”.

That is when Labor began to lose its way. In fact, by the time it reached its 42nd Commonwealth Conference held in Hobart from July 31 to August 3, 2000, the Labor Party could do no more than devote 21 complicated paragraphs on the “Basic Principles” and “Revenue” of “Financing government”, without spelling out its intention to re-introduce Labor’s 1910 law to collect the rental value of land.

In contrast, when the Menzies Government in 1953 had abolished the Federal Land Tax that was introduced by the Fisher Labor Government in 1910, the Federal Parliamentary Labor Party authorised Arthur Calwell to make a solemn vow that when Labour wins Government it would reintroduce the land tax.

On 24 February 1953, Calwell spoke in opposition to what Prime Minister Menzies had done, and told the Parliament: “We of the Australian Labor Party have always believed that the land is the patrimony of the people and that nobody has a complete and absolute title to it …. The land belongs to the people, and its use must be safeguarded and protected at all times …”

Mr. Calwell ended his 33 minute address with the solemn pledge “We have always believed in the land tax, and when happy days come again we shall restore the measure imposing the tax to the statute book of this country.” (Hansard, Vol 221, pp 165-170 passim).

A graduated tax on the unimproved value of land had remained an integral plank of the Labor Party’s Platform until 1961, when sneaky Labor politicians stupidly preferred the Tory option of raising revenue by high income tax and indirect taxation on the poor, and secretly removed the commitment to collect the economic rent of land without ever obtaining Conference approval for the deletion.

So, either by inadvertence, or maybe subterfuge, the fairest and most easily defended form of raising revenue has been omitted form Labor’s Platform ever since 1963.

At the first pre-Budget discussion after the Whitlam Government was elected in 1972, I raised the need to once again bring in legislation to collect the economic rent of land, instead of levying heavy direct and indirect taxation on wage and salary earners.

The following year, I wrote to Treasure Frank Crean asking that my proposal be considered in the 1974 Budget; but nothing happened because, like most adherents of orthodox economics, the Treasury bureaucrats don’t understand the economic rudiments Rent, Wages and Interest.

If only a Labor Government would return to Labor basics, it could abolish the Goods and Services Tax and exempt the wages of lower and middle income earners altogether.

Rent, is not a tax! It is merely giving to the community a rental equivalent of the special advantage of being allowed to hold the exclusive possession of a piece of land which due to its location or productivity, gives its possessor an advantage other don’t enjoy. So, by definition, a piece of commercial land in the heart of the busiest part of a big city, is always worth much, much more to the possessor than the same area in suburbs or in the centre of a small country town.

We must draw attention to the self-evident truth that the true economic value of land is not created by the person who is in possession of it. It is created by those who don’t have possession of it, but who would willingly pay the rest of the community a rent for the special advantage of its location or productivity.

Every minute of every day, the gross injustice of the present system of taxation is staring us in the face. And yet, we still allow the media barons to blind our vision to a better way or raising government revenue.

Working men and women living in our suburbs where the economic rent of their various house blocks is quite minimal compared with every one inch of street frontage on which the city’s skyscrapers are built, will soon see the advantage to be gained by paying the rental value of their land in return for the abolition of today’s heavy direct and indirect taxation, and from the abolition of indirect taxation which they cannot see, but which their pockets feel.

However, as our country lurches deeper and deeper into the mire created by present day fiscal policies, the correctness of our land policy will finally be gladly embraced by all except the wealthy and useless minority which is now permitted to grow fat on the misery of the majority.

The public has become wary of the major political parties which accept large donations from wealthy vested interests. They know that these donations are always matched by demands for special favours at the expense of others.

This is why the scene is set for Labour stalwarts (i.e. average Australian living in their modest suburban dwellings) to demand a return to first principles, the most important of which is to restore Labor’s long-held commitment to collect the rental value of land so that the present burdens of direct and indirect taxation upon the poor can become a thing of the past.

It was in the shearing sheds from 1928 to 1941 that I began my advocacy of the Labor Party’s 60-year campaign for the simple truths expressed by the great Henry George in his books: Progress and Poverty, The Science of Political Economy, The Condition of Labour, Protection or Free Trade, A Perplexed Philosopher, and The Land Question.

By Mason Gaffney, Economics Professor, University of California, Riverside

“Don’t you know that if people could bottle the air, they would? … there would be an American Air-Bottling Association… they would let millions die for want of breath, if they could not pay for the air.” — Robert G. Ingersoll

Times have caught up with Ingersoll. Ronald Coase, prominent Chicago economist, says polluters (whom he calls emitters, to avoid bias) have as much right to emit as victims (he says receptors) have to breathe clean air. It doesn’t matter, says Coase, how we assign property rights originally: as long as property is firm, the market will sort it all out. However, since emitters have invested in costly facilities, and property is sacred… you see whither this unbiased science is tending.

Was he laughed to scorn? Au contraire, he was raised on the shoulders of his adulatory peers and anointed a demi-god (which tells you something about his peers). Having risen on wings of theory the idea found its way into practice, and today The South Coast Air Quality Management District awards “offset rights” to those with worthy track records of emitting. New emitters must buy “property rights” from old ones.

In effect, we don’t fine people for emitting, we reward them with a right to continue. Then we can pay them to stop, by buying back the right we just gave away. This is putting the free market to work, they say. If you have not been emitting before, too bad. I have offered not to emit millions of tons of nitrates, and sulfates too. My price is modest, and highly competitive. I underbid the big refineries by 50%, but Air District officials just hang up on me, if you can believe it. They say I must have earned my offset right by suffocating the neighbors in the unregulated past.

Pursuant to Coase we should no doubt award the Ukraine a perpetual right to have melt-downs at Chernobyl, rights they could then sell to Uganda or Paraguay or other LDC wanting to modernize with a melt-down or two. Nicotine fiends with proven records of smoking in crowded rooms regularly over at least the last four years will receive official charm bracelets they can flash whenever asked to butt out. These, of course, will be modern “bearer bracelets,” transferable to the highest bidder. Anyone caught leaving a room filled with such legally sanctioned smoke might well be fined, and charged with violating the bracelet-bearer’s 5th Amendment rights.

And those who want to breathe? Coase says they should pay for the privilege, as they pay for indulging any personal taste. After all, they already pay those who supply them with land to live on. Only welfare bums would expect property owners to dip into their hard-earned savings and supply them with free air, when the market has a solution at hand. All they need do is buy offset rights from Ancient and Honorable Emitters. When they want to breathe, they just retire the rights upwind of them. This is a marvel of efficiency, too. They retire only what it takes to clean the air they need: no waste.

If they can’t afford to buy outright, they could rent - markets have ingenious solutions for all problems, like any good panacea. Gas masks are another free-market solution: much better than socialistic policies that would impose uniform clean air on everyone, whether they want it or not.

What about the new-born, with no prior history of either emitting or breathing? They come innocently into the world with no basis for being grandfathered in, and little money. Sometimes real men must put aside maudlin whining, grit their teeth, and just pull up the ladder, lest the lifeboat be swamped. It’s the free market way of population control, a modified kind of natural selection. As for the alleged innocence of the little brats, remember Original Sin, and The Lord of the Flies. There is, to be sure, a noisy crowd who want clean air to be generally available, and prate emotionally of natural beauty and rights. They are only “environmental activists,” an odd elitist lot whom objective scientists may disregard.

For that they gave Coase a Nobel Prize. You see, old Ingersoll was on the mark. Nothing is too absurd once we accept invading, usurping, and leeching as the bases of property.

By Nadia Weiner, Director, Adam Smith Club, Sydney, Australia

Although Adam Smith is often quoted, the so-called “Father of Economics” has rarely been read, either by his detractors or his admirers. Consequently he is often misunderstood.

Smith, who made such a strong stand against the protectionist mercantile system of trade of his day, devoted over one third of his masterpiece An Inquiry into the Nature and Causes of the Wealth of Nations, to discussing the subject of government revenue and the methods by which it may be best collected, including new taxes. This is not generally known.

When examining the different forms of taxation, Smith adheres to four maxims which a good tax should conform to:

• “The subject of every State ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the State.”
• “The tax each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, and the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.”
• “Every tax ought to be levied at the time, or in the manner in which it is most likely to be convenient for the contributor to pay it.”
• “Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the State.”

Bearing all these things in mind, there are two types of taxation which obtain Smith’s recommendations: a tax on luxury consumables and a tax on ground-rents (the annual value of holding a piece of land).

On the subject of luxury consumables, he is adamant about the definition of ‘luxury’ and of ‘necessary.’ By his definition, a ‘necessary’ may vary from place to place and from time to time. At the time of his writing, linen shirts, leather shoes and a minimum of food and shelter were definitely to be regarded as essential to a minimum decent standard of living. Taxes on salt, soap, etc., he harshly criticised as inequitably taking from the poorest elements of society. Taxes on luxuries, which were to include tobacco, he considered excellent in that no one is obliged to contribute to the tax: “Taxes upon luxuries have no tendency to raise the price of any other commodities except that of the commodities taxed… Taxes upon luxuries are finally paid by the consumers of the commodities taxed, without any retribution.”

More deserving of praise is the tax on ground-rents: “Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents, and the ordinary rent of land are, therefore, perhaps the species of revenue which can best bear to have a peculiar tax imposed upon them.”

Excise, customs, taxes on profits, were, according to Smith, either expensive to collect, as in the case of excise, or disincentives to produce, as in the tax on profits. He reserves harsh words for taxes which occasion the invasion of privacy, and on the subject of excise he says: “To subject every private family to the odious visits and examination of the tax-gatherers… would be altogether inconsistent with liberty.”

The harshest condemnation of all, however, was for taxes upon labour: “In all cases, a direct tax upon the wages of labour must, in the long run, occasion both a greater reduction in the rent of land, and a greater rise in the price of manufactured goods, than would have followed from a proper assessment of a sum equal to the produce of the tax, [levied] partly upon the rent of land, and partly upon consumable commodities.”

Mason Gaffney, Professor of Economics, University of California, Riverside

The following is the introduction to Professor Gaffney’s paper Neo-classical Economics as a Stratagem against Henry George, 5 July 1994.

This paper formed the basis of a book: The Corruption of Economics, Mason Gaffney and Fred Harrison, Shepheard-Walwyn (Publishers) Ltd, London, 1994. Buy the book

Introduction: The power of neo-classical economics

Neoclassical economics is the idiom of most economic discourse today. It is the paradigm that bends the twigs of young minds. Then it confines the fluorescence of older ones, like chicken-wire shaping a topiary. It took form about a hundred years ago, when Henry George and his reform proposals were a clear and present political danger and challenge to the landed and intellectual establishments of the world. Few people realise to what a degree the founders of Neoclassical economics changed the discipline for the express purpose of deflecting George, discomfiting his followers, and frustrating future students seeking to follow his arguments. The stratagem was semantic: to destroy the very words in which he expressed himself. Simon Patten expounded it succinctly. “Nothing pleases a… single taxer better than… to use the well-known economic theories… [therefore] economic doctrine must be recast” (Patten 1908, p.219; Collier, 1979, p.270).

George believed economists were recasting the discipline to refute him. He states so, as though in the third person, in his last book, The Science of Political Economy (George, 1898, pp.200-209). George’s self-importance was immodest, it is true. However, immodesty may be objectivity, as many great talents from Frank Lloyd Wright to Mohamed Ali and Frank Sinatra have displayed. George had good reasons, which we are to demonstrate. George’s view may even strike some as paranoid. That was this writer’s first impression, many years ago. I have changed my view, however, after learning more about the period, the literature, and later events.

Having taken shape in the 1880-1890s, Neo-Classical Economics (henceforth NCE) remained remarkably static. Major texts by Marshall, Seligman, and Richard T. Ely, written in the 1890s, went through many reprintings each over a period of 40 years with few if any changes. “It was for the Chautauqua Literary and Scientific Circle (1884) that I wrote the first edition of my Outlines, under the title Introduction to Political Economy. In this first edition of the Outlines there is to be found the general philosophy and principles that have shaped all future editions, including that of 1937″ (Ely, 1938, p.81).

Not until 1936 was there another major “revolution,” and that was hived off into a separate compartment, macro-economics, and contained there so as not to disturb basic tenets of NCE. Compartmentalisation, we will see in several instances, is the common NCE defense against discordant data and reasoning. After that came another 40 years of Samuelson’s “neoclassical synthesis.” J.B. Clark’s treatment of rent, dating originally from his obvious efforts to refute Henry George (see below), “has been followed by an admiring Paul Samuelson in all of the many editions of his Economics” (Dewey, p.430).

Clark’s capital theory “… gives the appearance of being specially tailored to lead to arguments for use against George” (Collier, 1979, p.270). “The probable source from which immediate stimulation came to Clark was the contemporary single tax discussion” (Fetter, 1927, p.142). “To date, capital theory in the Clark tradition has provided the basis for virtually all empirical work on wealth and income” (Dewey, 1987, p.429; cf. Tobin, 1985). Later writers have added fretworks, curlicues and arabesques beyond counting, and achieved more isolation from history, and from the ground under their feet, than in Patten’s dreams, but all without disturbing the basic strategy arrived at by 1899, tailored to lead to arguments against Henry George.

To most modern readers, probably George seems too minor a figure to have warranted such an extreme reaction. This impression is a measure of the neo-classicals’ success: it is what they sought to make of him. It took a generation, but by 1930 they had succeeded in reducing him in the public mind. In the process of succeeding, however, they emasculated the discipline, impoverished economic thought, muddled the minds of countless students, rationalised free-riding by landowners, took dignity from labour, rationalised chronic unemployment, hobbled us with today’s counterproductive tax tangle, marginalised the obvious alternative system of public finance, shattered our sense of community, subverted a rising economic democracy for the benefit of rent-takers, and led us into becoming an increasingly nasty and dangerously divided plutocracy.

The present paper purports to identify the elements of Neo-Classical Economics (NCE) that were planted there to sap and confound George, and show how they continue to warp, debase and vitiate much of the discipline called economics. Once a paradigm is well-ensconced it becomes a power in itself, a set of reflexes to sort the true and false. Any exception spoils the web of interpretation through which art seeks to make human experience intelligible. Only the young, the brave, the energetic, the sincere and the sceptical can break off such fetters. This work is addressed and dedicated to them.

By Fred E. Foldvary

Fred received his B.A. in economics from the University of California at Berkeley, and his M.A. and Ph.D. in economics from George Mason University. He has taught economics at the Latvian University of Agriculture, Virginia Tech, John F. Kennedy University, California State University at Hayward, the University of California at Berkeley Extension, and Santa Clara University.

Fred is also a researcher and author on public finance, governance, ethical philosophy, and land economics. He may be contacted by foldvary@pobox.com.

For the past hundred years, economics has been dominated by the neoclassical school of thought. Neoclassical guys have constructed a big mansion of economic theory, and some of the rooms look very elegant, but there are some parts of the house of neo-econ which are shoddy, badly constructed, incomplete, and designed from faulty blueprints. It needs a make-over.

Henry George, the late-19th-century economist and social philosopher, was good at juicing up and fixing drab, dull, clumsy economic doctrines. His followers, Georgists or geoists, can take a worn out economic theory and spruce it up into a shining object of utility and beauty. So let’s apply a Georgist eye to the broken doctrines of the neoclassical guy for an economic make-over.

Neoclassical guys like to talk about trade-offs. Resources are scarce while human desires are unlimited, so if you want more of one thing, you have to give up getting something else. This is true for goods, but the neos apply this also to the two outcomes we want from an economy, efficiency and equity. An efficient economy maximizes the output we can get from input resources. Equity means economic justice, how fair and equitable is the distribution of wealth.

The neoclassical guy says that if we want more equity, the cost is less efficiency, and if we want more efficiency, we have to sacrifice equity. That’s because in neo thought, a more equal distribution of income requires redistribution from the rich to the poor, and higher taxes on the rich reduce investment and production.

The problem here is that neoclassical guys suffer from economic amnesia. They know about land and rent, but they forget this when they think about anything else. One big reason for the inequality of wealth is the highly unequal income from land rent. If society shares this rent equally, there is no reduction in efficiency, and indeed there is greater efficiency.

Neoclassicals also forget to factor in the capitalization of public services into land rent. Public works pump up land rent, and if the landowners don’t pay for the works from that rent, their land value jumps up and this creates incentives for speculators to buy land to get that rent, driving land prices up even higher. Speculatively high land values then stop folks from getting land for current use. Tapping that rent eliminates the subsidy, and so land gets used more productively.

The Georgist eye can see that a shift from today’s punitive taxes towards public revenue from land rent would increase both efficiency and equity.

The neoclassical guy knows that land has a fixed supply, so tapping the rent creates no excess burden or deadweight loss for the economy. But this knowledge gets boxed in, compartmentalized. It’s stuck in the attic of the economic mansion and forgotten about in the other rooms. In contrast, the Georgist eye always keeps the whole mansion in mind. The neoclassical guy needs a theory make-over to tear down the walls he has constructed and get an economic blueprint that is whole and integrated. The Georgist will also take land theory from the attic and place it prominently in the living room.

Another faulty area of neoclassical thought is the producer surplus, the difference between the price of a good and the cost of production. The neoclassical guy draws a supply curve sloping up as some producers have higher costs and so need a higher price to be profitable. But the neoclassical guy also says that in a competitive industry, in the long-run, the firms only make normal profits, the usual returns to labor and assets. If profits are higher than that, firms will enter the industry to get those extra profits, driving the price down and squeezing out the profit.

But there is a contradiction here. If there is a producer surplus, a gain above costs and normal returns, how can there also be no economic profits? Neos don’t think about this, or else they get bewildered and end up relaxing the assumption of no economic profit. The Georgist eye can clear this up. In competitive markets, the owners don’t get the producer surplus; it goes to the input providers, but not to labor or capital goods. It goes to the factor which cannot move or expand, land. The producer surplus is land rent!

Neoclassical guys like to point out that price controls, such as minimum wages and rent controls, create problems such as more unemployment and a housing shortage. But they are perplexed about poverty. They say some controls and welfare programs may be required because in the market, some folks just end up poor. Again, the Georgist eye sees more clearly. Henry George explained why poverty persists in the midst of progress. The free market will eliminate poverty, but only if it is truly free of all trade barriers, including all taxes on production and exchange, and only if the rent is shared or tapped for public revenue.

The neoclassical guy is puzzled because he sees a grin but no body, while the Georgist eye can see it is the Cheshire cat. The fat cat is grinning, because he reaps what others sow, and the public can’t see the cat because their neoclassical economists don’t even know it’s there.

To do a complete make-over on the neoclassical guy, the Georgist needs to teach him the law of rent and the law of wages. This was in classical theory, but the neoclassicals threw it out when they tucked land in the attic. It’s simply a model with grades of land of decreasing productivity.

The least productive land in use is called the ‘margin of production,’ which is where the general wage level is set. After paying for wages and capital goods, the rest is a surplus that goes to rent.

If Georgists and geoists could do a make-over on all the neoclassical guys, what a difference it would make. Economists would put land rent at the center of economic policy, and soon the public would understand it, and policy makers could no longer ignore it. Poverty would be extirpated, the welfare state eliminated, and conflicts over land would diminish.

But to do this, the Georgist eye must see 20-20. The geoist eye needs a clear vision, not clouded by the astigmatism of statist monetary doctrines and the myopia of blaming corporations. The clear eye needs the ethical understanding that the only evil is coercive harm to others. The Georgist eye needs to understand the problem of mass democracy and its remedy, small-group voting. Only with this complete understanding, going a bit beyond classical thought, will the Georgist eye be able to turn the bumbling, stumbling neoclassical guy into a cool economics dude who is hip to the cause and cure of our economic woes.

Karl Williams, former President, Prosper Australia Inc.

200 Word Overview

Geonomics (’law of the Earth’) represents a completely different way of looking at The Earth. Starting from the self-evident (but ignored!) principle that The Earth (land and natural resources) should be the equal and common birthright of all humanity, a radically different set of economic and social principles emerge. However, the means to implement these principles is relatively simple - essentially, taxing land values rather than production.

That unemployment is inevitable in modern industrialised economies is not true. In economic terms, land has the unique qualities which gives landholders unique monopolist powers and the ability to make massive speculative profits while their land lies idle or under used while its value is rising.

At once we turn economic relations on their head by the collection of the land rent which will force landholders to put their land to full use (employing others and not wasting surrounding amenities) or passing the land titles on to those who can use it themselves. The flip side is that this massive source of government revenue allows us to phase out unfair, punitive taxes on production.

Many unique and urgently-needed environmental benefits flow from Geonomics - halting urban sprawl, encouraging sustainable agriculture and allowing us to put a true value on the intangible benefits of natural resources.

Geonomics encompasses a set of sweeping changes to the present economic systems based on a relatively simple adjustment to our tax system. It is based on a timeless philosophy that was elaborated upon to the greatest degree by the 19th century social philosopher and reformer, Henry George. The underlying philosophy is undeniably self-evident, but how far have we strayed from these noble ideals today?! It is that the Earth (land and natural resources) should be every person’s natural birthright - i.e. should be our equal and common inheritance - as it was not created by any person, but is rather the gift of Nature/God/The Universe. This should be the first listing in the UN Declaration of Human Rights, but it doesn’t even get a mention!

Universal land rights are central to Geonomics for not only indigenous peoples have been dispossessed, but nearly all of us find that we’re born on to a planet where “all the seats are taken” with the result that, effectively, we have to pay someone else for permission to live.

Land is not just a piece of dirt, but is the necessary “living space” integral with human existence - at least as long as the Law of Gravity holds! In economic terms, the nature of land also has unique qualities, including:

1. Being relatively fixed in supply (you can’t make any more of it)
2. Having a constant demand (we all need at least enough on which to stand)
3. It’s value is not built up by the landholder, but by the community (the all-important locational value of land would be nothing if not for the presence of population and tax-funded infrastructure).

Previous attempts to achieve land justice have all been flawed because they have clung to the sense of wanting to “own” the Earth like another mere commodity. Many indigenous peoples have reiterated that we belong to the Earth, rather than the Earth belonging to us. But in more economic terms, so called “land reform” that relies on outright land ownership in perpetuity is doomed to failure, in terms of social justice, because to “divvy up” land equitably is impossible for the following reasons:

1. Land has vastly different values. How can one divide up amongst the population central business district land, suburban land, rural & agricultural land, and wilderness?
2. Even if (1) could be overcome, land values change constantly. Sooner or later all would have unequal landholdings, depending on such circumstances as population movements and the siting of infrastructure such as roads, schools, electricity supply, the provision of irrigation etc.
3. Even if (1) & (2) could be overcome, what about next year? And the year after that, and after that ……? In other words, the newborn have missed out on the impossibly-fair divvy-up, not to mention immigrants and other newcomers who will constitute the new class of landless who happened to arrive too late.

Land is not confiscated

It should be stressed that Geonomics does not propose the confiscation of land in order to have some shared Commons, as to own a permanent home is an almost universal human need. The actual solution is elegantly simple, but with profound effects. It is this:-

In return for each individual’s exclusive use of Our One Earth, it is only fair that society be reimbursed for the loss of that resource. Therefore, each landholder should repay society a land rent (not at all an arbitrary tax) in precisely-calculated accordance with the value of the land holdings. That is, those who use more valuable land should pay more rent back to society based on the land value. Importantly, land titles and security of tenure remain as before.

This rent represents a potentially huge source of community/government revenue. But there is a flip-side to this revenue-raising equation.

A more just tax system

By collecting the land rent and thereby dispensing land justice based on our differing needs for Our One Earth, we can start to phase out taxes on production. These taxes are robbery! - why should someone be treated as a social nuisance and effectively fined every week through the imposition of, say, income taxes just because they work and support themselves and perhaps even provide employment for someone else? Therefore we have TWO forms of robbery which Geonomics eliminates:

• The economic rent (the technical term for rent based on land values) misappropriated by landowners. This rightly belongs to society.
• The taxes on production (income tax, sales tax, payroll tax etc.) which rob people for no justifiable reason at all.

The rationale for this type of reform could be summarised as:

• “What society does for you, you should return to society.”
• “What you do for yourself is rightfully yours.”

It should be noted that this principle certainly does not stand for any loony right-wing individualism - Geonomics only applies to the means of government revenue raising. So far as government expenditure is concerned, there is every means by which social welfare for the underprivileged can be made as before.

Unemployment

Arguably, the most serious problem in the world today is that of unemployment. All the think-tanks, political policy makers, social commentators and ordinary people will NEVER solve this absurdly-unnecessary problem unless the land problem is addressed first and foremost. Why call it “absurd”? - because on the one hand there are millions of people out of work who want to work and, on the other hand, there are endless needs for more work to be done (more teachers, carers for the elderly, builders of better housing & infrastructure etc.). Something is screwed up here! The key to this absurdity is the fact that we’ve made it profitable to make speculative profits through holding land idle or grossly under-used. The right land can be held until its value is built up by the community, then sold back to the community (who effectively pay for it twice, the first time through their taxes). Not only are there truly “unearned” forms of income here (and there are losers for each speculative winner), but essential land is kept idle or under used. And idle land equates to idle hands.

How can Geonomics encourage the full and efficient use of land? Essentially, it is because the land rent financially encourages the landholder either to use the land to its full potential (thereby creating a need to employ others to work on that land) or else to pass on the land to someone else who will do so. This is because the land rent remains fixed - so whether the landholder uses the land or not, that same rent is payable. One cannot keep land idle for long, for the land must be productively used in order to cover the rental dues belonging to society.

Taxes on pollution

Some taxes are necessary, such as carbon taxes and pollution taxes which discourage the abuse of natural resources. Similarly, taxes on alcohol and tobacco (forcing users, in effect, to pay for their future health costs) should remain. Other social undesirables, such as violent pornography, could also be discouraged through the tax system. However, the vast majority of taxes are those which fall on production - income, sales, company, payroll taxes etc., - and these not only rob people for no good reason (remembering that we are now collecting the land rent), but discourage real wealth creation. Encouraging truly productive activities will be as simple as ending the confiscation of part of their earnings! In other words, the private sector is given every incentive to create wealth and jobs because earnings will be retained rather than being taxed.

Historically, there have been huge campaigns mounted by a very few wealthy, vested interests to oppose this simple but fundamental change to our tax system. The traditional land barons and property developers have, more than anyone else, much to lose - what they will, in fact, lose are their privileges! Large landholders under the present system can simply sit on their land and wait for the community to build up its value as population grows and tax-funded infrastructure expands. The land can be kept unused, without penalty, until the community is prepared to bid what the landholder is prepared to accept. However, when the community is collecting the rent, the boot will be on the other foot. Labour will be in demand, as land is used as it should be.

If you were running an enterprise and arranged for the purchase of a large and expensive item of capital equipment (say, a printing press or a network of computers), how long would you wait to use it after it had been delivered? Paying millions of dollars for your purchase, no businessman in his right mind would let the shrink-wrap remain for a single day before immediately putting the item to full use? Have you then, ever wondered about multi-million-dollar blocks of land that are used as single-storey car parks in the city for years or, in the suburbs, as market gardens or simply as land which grows nothing but thistles? And all around live thousands who need that land in order to work - not to farm it, but to use its valuable location (why it’s so expensive in the first place) in order to produce goods and services. Collect the rent and there’ll be lots of busy hands and no more thistles!

But it’s not just in the private sector that there will be employment-producing, wealth-creating activity magically spring into being with the simple adjustment of taxing land values rather than production. Have you not also wondered why governments cannot afford to keep investing in badly-needed infrastructure such as roads, schools and public meeting places? It’s because the governments’ funds (OUR taxes) disappear into the “Black Hole” of land values!!! If we collect the rent this could never happen.

Rejuvenating public transport and community

To illustrate the point, let us look at something that’s long been neglected because of its expense - public transport. Rail networks are efficient and environmentally-friendly people-movers, but governments can’t afford to invest the hundreds of millions that are needed for a proper system because the investment goes, like all infrastructure spending, into improving land values. In order to recover part of its outlay, governments must set prohibitively-high fare structures which often, in the end, yield less revenue because people are so discouraged by the expense. But if we switched from the false principle of “user pays” to “beneficiary pays” and required the landholder to pay for the benefits conferred of a railway line being opened up, then such infrastructure could be self-funding. Here we would have a completely different ball game - with any infrastructure spending there would be increased land values and, importantly, more land rent to collect. With rent to collect, fares could be reduced. As fares are reduced, adjacent land becomes more desirable - hence there is more rent to collect. More rent means less fares means more rent means ……. until, in the end, the only question to answer is whether public transport should be free or whether some nominal charge should be imposed to make it appreciated and prevent unnecessary overuse.

Why not have magnificent botanical gardens in every single suburb? Because we’re not collecting the rent to pay for such quality of living and to encourage truly productive labour. Why not more public plazas, community facilities, sports grounds, public libraries? Because up until now the funds which paid for these facilities disappeared into the Black Hole. And besides the beautification of our surroundings, the improved quality of life for all and the boost to employment, isn’t it simply nicer to live as a community? We’ll still have our own houses and back-yards, but we’ll bring back the “village feel” to living, as we have common access to attractive shared facilities with our neighbours. Compare this to so-called Economic Rationalism which would have the “winners” in society living in private fortresses, like millionaires in Beirut! There is much more to say on these ideals, which address many social problems concerning urban alienation and anonymity - nut it out for yourself!

Open and just tax collection

In our truly civil society, massive resources will not be wasted on the tax system as they are now. We shall have professionally-qualified land valuers make an annual assessment on all land, taking into account access to all community-created amenities such as distance to schools and public transport, clarity of water and TV reception etc. and discounting for things such as noise and pollution from roads and factories. Everyone’s assessment will be supported by the factors taken into account, made more objective by computer-assisted comparisons between similar sites. Importantly, you’ll also be able to scrutinise your neighbour’s assessment and that of Kerry Packer. The system is virtually corruption-proof! And what about this: this tax cannot be evaded! No-one can shift it offshore or bury it in convoluted accounting transactions! Of all things on this planet, land is the one thing which cannot be hidden.

Furthermore, this will enable us to scrap the massive waste of having an army of Tax Department officials chasing an army of smart lawyers and creative accountants. This expensive absurdity produces ZERO wealth and, in any case, makes tax virtually optional for the rich. Moreover, it intrudes for no good reason into our private lives - why on earth should we be accountable for the income we earn or the goods we sell? And the compliance costs of filling in returns and forwarding remittances and keeping records and dodging taxes where possible through the black economy - isn’t this not only an unproductive way of spending our valuable time, but also a financial burden?

What’s the other barrier to employment - probably so accepted within our present paradigm that we can’t see it for what it is? It’s simply the price of land. Before anyone can undertake any work, unless they’re squatters, they need some land on which to stand. If they want to work more productively, that land will have passing traffic and surrounding amenities, and will be accessible to customers. But the big up-front barrier to self-employment (whether individually or collectively) is the vast amount (often representing decades of life savings) required to purchase land or the constant drain of loan repayments and interest. So what will change with Geonomics? Simply this - land will have no price!!! At the point where we’re eventually collecting the full site rent, the value of the surrounding amenities will be exactly offset by the rental dues to society. Here the zero (approximately) price of land (buildings and other improvements, of course, have retained their purchase price) will be asserted rather than fully explained, but it should be noted that when one is to purchase a property, one will be effectively bidding for the improvements and ensuring that one can make suitable use of the surrounding amenities which will be paid for through rental dues.

Globalisation - Glocalisation

The breathtaking changes brought about by this simple switch in the tax system go on and on. Urban sprawl will be greatly curbed - unused or under-used sprawling land will give way to a natural urban landscape. Cities will be much more compact, further encouraging public transport networks, cyclists and even pedestrians. Other great urban environmental problems will be dramatically curbed - cities sprawling over farmland and natural reserves, wastage of resources as pipelines and roads “leapfrog” over idle land, and time and fossil fuels being wasted because of daily commuting from distant suburbs.

Agricultural/rural problems? By basing the rental calculations on what is termed the “maximum sustainable yield”, farmers will be positively encouraged to farm sustainably as they will be saddled with the same fixed annual rent in perpetuity based on what the land is capable of producing in the long term. They will have to plan long-term in order to cover their rent. Again, technicalities won’t be discussed here.

Wilderness, natural reserves and other natural resources?

Today, they too often go to the person who makes the highest cash bid, with little accounting for externalities (detrimental effects impacting elsewhere). Furthermore, intangible benefits (ecological, aesthetic, recreational, spiritual and inherent worth) are rarely taken into account in determining land use as they are not traded on the market place and are not accorded a $ value. But the focus on land assessment (rather than the scrutinising of individual activities) positions Geonomics to factor all these items into a “good guess equation” to determine whether, say, the $ returns to the community through the rental collection will outweigh the benefits that society (non-human as well, if we like) would otherwise derive from preserving such an area. A good guess at the true value of land and natural resources is better than a wild guess, and a wild guess is better than no guess at all. This is the absurd state of things today with respect to “natural capital” - not even a guess is made of its value, and it can be depleted without affecting our Gross National Product at all.

This we also assert, (and debate it rather than laugh at it if you disagree) that Geonomics encompasses a set of “natural laws” that promote prosperity and social justice. These laws cannot be ignored without dire consequences - witness our endless economic problems despite every best effort as well as the advances of science. Geonomics is not a panacea for all economic and social problems, but without it there can be no solution to such problems. Many other problems would be addressed, directly and indirectly, by conforming to The Law of the Earth, such as inflation, high interest rates, foreign control and, if not already self-evident to you, the reader, great disparities of wealth.

Rewarding creativity

There will still be some lesser disparities of wealth, but not because of lack of opportunity. Some will prefer to live a life of voluntary simplicity, perhaps, and society requires little in return from those who reside on land with few surrounding amenities. On the other hand, some great inventors, sports persons, actors and authors, for instance, will earn much more than others if, in a free and fair market, people are prepared to pay for what those individuals demand for their services. But, mostly, all the great forms of privilege will be abolished, for the simple rule of not reaping what one has not sown will be our society’s guiding light. Other speculative forms of wealth can be discouraged through the tax system - for example, a 1% tax on foreign currency transactions and share market trading will discourage frenetic speculative activities but not those of genuine long-term investors. These speculative activities are just legalised forms of robbery - the massive profits that can be literally made in hours are taking wealth out of someone else’s pockets.

The good and inspiring society

The EarthSharing network truly represents The Good Society, and we want all to understand how we could simply bring about social justice and economic prosperity for all. Your willingness to understand and pass on the true laws of economics will be your personal contribution to achieving this noble ideal.

Victor Lebrun

Victor Lebrun was a personal friend and Secretary to Leo Tolstoy. This is a translation of his article published in the July 1956 issue of the French periodical, Contre-Courant, and reprinted in the July-September 1956 issue of the French Georgist magazine Terre et Liberte. Its historical interest, in view of the establishment of Communism in Russia in 1917, needs no emphasis.

In giving his extreme and sympathetic attention to other thinkers and writers, the great Tolstoy differed essentially from his colleagues - the geniuses of all countries and all centuries. But nothing shows the complete honesty and surprisng liberty of his spirit more than his attitude towards Henry George.

Conversion to Georgism

It was at the beginning of 1885 that he happened to lay his hands on the books of the great American sociologist. By then the moral and social doctrine of the thinker had been solidly and definitely established. Man’s supreme and unique duty was to perfect himself morally and not to co-operate with the wrong. Thus the social problem would be automatically solved when the majority has understood the true meaning of pure Christianity and when it has learned to abstain from all crimes which are frequently and commonly committed. All reasoning about the precise nature of the citizens’ rights, about laws, about the organisation of governmental compulsion for their protection is anathema to the great thinker.

But…hardly had Tolstoy had a glance at Social Problems and Progress and Poverty and he was completely captivated by George’s outstanding exposition. His strict daily routine is broken.

‘This morning I read George instead of writing’ ,Tolstoy confesses in a letter to his wife. Two days later he adds: ‘I read my George’. (He says ‘my’. He never said this of any other author). ‘This is a very important book. This is a step forward of equal importance to the liberation of our serfs. This is the liberation of the earth from private ownership.’

‘Their point of view in this matter is the control of men. And it is necessary to read George, who defined the problem with precision and definitively. After this there is no more debating, one has to take resolutely one side or the other. Personally I demand much more than he does: but his project is the first step of the ladder which I would like to climb.’

And the thinker does not hesitate any longer. From this encounter on he resolutely and enthusiastically takes George’s side, and to his last breath for a quarter of a century, he makes every effort without relaxation to make his discovery known. He publishes articles on George: he writes introductions to the remarkable translations of his works.

Letters to Stolypin

The correspondence of the Georgist Tolstoy with the Prime Minister of the time is also astonishing. Here the summits of the two camps clash, the two leading theories, those who ‘think right’ and the honest ones.

In 1907 the people were exasperated. The peasant revolt was in full swing. And the Minister made his soldiers fire at the crowds, hanged peasants almost daily, imprisoned and deported them by the thousands. The gallows had been named after him ‘Stolypin’s necktie’. Tolstoy suffered terribly from the crimes and the hatred he saw growing on both sides. Finally he lost his patience. On the 26th July, 1907, he sent word to the Prime Minister:

‘Peter Arcadievich, I write to you under the impulse of my best feelings towards the son of my friend.

‘You are on the wrong road. You have two possibilities in front of you: the one is to continue not only to take part in but direct all the deportations, forced labour, executions, and not having achieved your aim, leave behind you a sordid memory. Or, doing the opposite, advance the peoples of Europe by helping to destroy the old, enormous injustice of the appropriation of the soil. In the latter way you would truly accomplish a great and good task, and you would appease the people through the most efficient of processes by giving satisfaction to their most loyal demands.

‘This would stop these horrible crimes which are perpetrated on the side of the revolutionaries as well as on the side of the Government.

Leo Tolstoy’

It is after three months that the Minister decides to reply:

‘Leo Nicolaievich, don’t think that I have not given my attention to your letter. I couldn’t answer it because it touched me where it hurt. You consider to be wrong what I consider to be for the welfare of Russia…

‘I don’t deny the doctrine of Henry George but believe that the Single Tax could in time (sic) help in the struggle against the big estates. At present I don’t see any reason why we should, here in Russia, chase the owners from their lands, which they cultivate better than the peasants. Quite the contrary, I see the necessity of making it possible for the peasants to acquire a piece of land of their own…

‘How could I do anything else than what I consider to be right. And you write to me that I am on the road of bad repute, of cruel actions, and above all of sin. Believe me that, feeling the possibility of approaching death, one cannot avoid thinking of these questions, and my road seems straight to me. I understand that it is completely in vain that I write this letter.

‘Accept my apologies.

Yours, Stolypin.’

This is the Prime Minister’s answer. And he goes on with his countless crimes.

On the 28th January, 1908, Tolstoy loses patience:

‘Peter Arcadievich, why? Why are you losing yourself in going on with your erroneous action which can only lead to aggravation of the general situation and of your position in it? Courageous, honest and noble man, and I know you as such, should not persist with his errors, but should recognise them and direct his forces to correct their consequences…

‘Your two errors: the violent struggle against the irresistible force of the people, and the consolidation of the ownership of land can be corrected by a simple, clear and achievable reform. It has to be recognised that the territory of the country is the equal property of the entire population, and a land tax has to be established which would correspond exactly to the privilege enjoyed by each site. This rent would replace entirely all taxes.

‘Only this measure can appease the people … Only this measure can dispose of the horrible repression which those who revolt have to suffer …I repeat that I write this to you wishing you the best and loving you …

Leo Tolstoy.’

This second letter remained unanswered, but the terrible agony of the horrible regime remained.

Some time later the Prime Minister was assassinated by a revolutionary, and in 1918 the communists gained power. The hoarders of territory refused to pay the nation the economic rent. Now everything was taken from them. None escaped punishment.

It is terrifying to re-live this era, to re-read this correspondence.

The Economy of the Future

In thanking George for a present of his works, the master asks the intermediary to tell him that he is ‘ enchanted by the clarity, the mastery and conclusions of his expositions; that George was the first who had put down solid foundations for the economy of the future, and that his name would always be remembered with gratitude by mankind.’

Tolstoy wrote to his wife - at the time of George’s death: ‘Henry George is dead, it is strange to say but his death surprised me like the death of a very close friend. The newspapers announce his passing and do not even speak of his books, which are so remarkable and of such great importance.’

A fragment of Tolstoy’s introduction to Social Problems shows to what degree he appreciated his works. The great master wrote:

‘Henry George said: “To those who have never studied the subject, it will seem ridiculous to propose as the greatest and most far-reaching of all reforms a mere fiscal change. But whoever has followed the train of thought through which in preceding chapters I have endeavoured to lead, will see that in this simple proposition is involved the greatest of social revolutions - a revolution compared with which that which destroyed ancient monarchy in France, or that which destroyed chattel slavery in our Southern States were nothing”.

‘And see, this is just the enormous importance of the big and real reform proposed by George that has not been understood in the world until now.’ Tolstoy continues:

‘George’s idea which changes the way of living of the people, to the advantage of the big majority - at present downtrodden and silent, and to the detriment of the ruling minority–this idea is expressed so convincingly and effective- ly and above all so simply that it is impossible not to understand it. For this reason, there is only one way to fight against it, to falsify it and to keep silent about it. Both are practised with such pains that it is difficult to induce people to read George’s books attentively and to deepen his doctrine. In the whole world, among the majority of intellectuals the ideas of George continue to be misinterpreted, and the indifference towards them appears to grow.

‘But a precise, and consequently fertile thought, cannot be destroyed. However one tries to strangle it, it remains more alive than all the other doctrines which are vague and devoid of meaning and behind which one tries to force it. Sooner or later truth will pierce the veil by which it is hidden, and will throw light over the world.

Such is the thought of Henry George’.

Other Letters

To TM Bondaref, who had written from Siberia asking for information about the ‘Single Tax’. THIS IS Henry George’s plan:

The advantage and convenience of using land is not everywhere the same; there will always be many applicants for land that is fertile, well situated, or near a populous place; and the better and more profitable the land, the more people will wish to have it. All such land should, therefore, be valued according to its advantages: the more profitable - dearer; the less profitable - cheaper. Land for which there are few applicants should not be valued at all, but allotted gratuitously to those who wish to work it themselves.

With such a valuation of the land - here in the Toula Government, for instance - good arable land might be estimated at about 5 or 6 roubles the desyatina; kitchen-gardens in the villages, at about 10 roubles the desyatina; meadows that are fertilized by spring floods at about 16 roubles, and so on. In towns the valuation would be 100 to 500 roubles the desyatina, and in crowded parts of Moscow or Petersburg, or at the landing-places of navigable rivers, it would amount to several thousands or even tens of thousands of roubles the desyatina.

When all the land in the country has been valued in this way, Henry George proposes that a law should be made by which, after a certain date in a certain year, the land should no longer belong to any one individual, but to the whole nation - the whole people; and that everyone holding land should, therefore, pay to the nation (that is, to the whole people) the yearly value at which it has been assessed. This payment should be used to meet all public or national expenses, and should replace all other rates, taxes, or customs dues.

The result of this would be that a landed proprietor who now holds, say, 2,000 desyatina, might continue to hold them if he liked, but he would have to pay to the treasury - here in the Toula Government, for instance (as his hodling would include both meadow- land and homestead) 12,000 or 15,000 roubles a year; and, as no large landowners could stand such a pay- ment, they would all abandon their land. But it would mean that a Toula peasant, in the same district, would pay a couple of roubles per desyatina less than he pays now, and could have plenty of available land nearby, which he would take up at 5 or 6 roubles per desyatina. Besides, he would have no other rates or taxes to pay, and would be able to buy all the things he requires, foreign or Russian, free of dutv. In towns, the owners of houses and manufactories might continue to own them, but would have to pay to the public treasury the amount of the assessment on their land.

The advantages of such an arrangement would be:

1. That no one will be unable to get land for use.
2. That there will be no idle people owning land and making others work for them in return for permission to use that land.
3. That the land will be in the possession of those who use it, and not of those who do not use it
4. That as the land will be available for people who wish to work on it, they will cease to enslave themselves as hands in factories and works, or as servants in towns, and will settle in the country districts.
5. That there will be no more inspectors and collectors of taxes in mills, factories, refineries and workshops, but there will only be collectors of the tax on land which cannot be stolen, and from which a tax can be most easily collected.
6. (And chiefly) That the non-workers will he saved from the sin of exploiting other people’s labour (in doing which they are often not the guilty parties, for they have from childhood been educated in idleness, and do not know how to work), and from the yet greater sin of all kinds of shuffling and lying to justify themselves in commiting that sin; and the workers will be saved from the temptation and sin of envying, condemning and being exasperated with the non-workers, so that one cause of separation among men will be destroyed.

To a German Propagandist of Henry George’s Views.

It is with particular pleasure that I hasten to answer your letter, and say that I have known of Henry George since the appearance of his Social Problems. I read that book and was struck by the justice of his main thought - by the exceptional manner (unparalleled in scientific literature), clear, popular and forcible, in which he stated his cause - and especially by (what is also exceptional in scientific literature) the Christian spirit that permeates the whole work. After reading it I went back to his earlier Progress and Poverty, and still more deeply appreciated the importance of its author’s activity.

You ask what I think of Henry George’s activity, and of his Single Tax system. My opinion is the following:

Humanity constantly advances: on the one hand clearing its consciousness and conscience, and on the other hand rearranging its modes of life to suit this changing consciousness. Thus, at each period of the life of humanity, the double process goes on: the clearing up of conscience, and the incorporation into life of what has been made clear to conscience.

At the end of the eighteenth century and the commencement of the nineteenth, a clearing up of conscience took place in Christendom with reference to the labouring classes - who lived under various forms of slavery - and this was followed by a corresponding readjustment of the forms of social life, to suit this clearer consciousness: namely, the abolition of slavery, and the organization of free wage-labour in its place. At the present time an enlightenment of men’s consciences is going on in relation to the way land is used; and soon, it seems to me, a practical application of this new consciousness must follow.

And in this process (the enlightenment of conscience as to the utilization of land, and the practical application of that new consciousness), which is one of the chief problems of our time, the leader and organizer of the movement was and is Henry George. In this lies his immense, his pre-eminent, importance. He has helped by his excellent books, both to clear men’s minds and consciences on this question, and to place it on a practical footing.

But in relation to the abolition of the shameful right to own landed estates, something is occurring similar to what happened (within our own recollection) with reference to the abolition of serfdom. The Government and the governing classes - knowing that their position and privileges are bound up with the land question - pretend that they are preoccupied with the welfare of the people, organizing savings banks for workmen, factory inspection, income taxes, even eight-hours working days - and carefully ignore the land question, or even, aided by compliant science, which will demonstrate anything they like, declare that the expropriation of the land is useless, harmful, and impossible.

Just the same thing occurs, as occurred in connection with slavery. At the end of the eighteenth and the beginning of the ninteenth centuries, men had long felt that slavery was a terrible anachronism, revolting to the human soul; but pseudo-religion and pseudo- science demonstrated that slavery was not wrong, that it was necessary, or at least that it was premature to abolish it. The same thing is now being repeated with reference to landed property. As before, pseudo- religion and pseudo-science demonstrate that there is nothing wrong in the private ownership of landed estates, and that there is no need to abolish the present system.

One would think it would be plain to every educated man of our time that an exclusive control of land by people who do not work on it, but who prevent hundreds and thousands of poor families from using it, is a thing as plainly bad and shameful as it was to own slaves; yet we see educated, refined aristocrats - English, Austrian, Prussian, and Russian - making use of this cruel and shameful right, and not only not feeling ashamed, but feeling proud of it.

Religion blesses such possessions, and the science of political economy demonstrates that the present state of things is the one that should exist for the greatest benefit of mankind.

The service rendered by Henry George is that he has not only mastered the sophistries with which religion and science try to justify private ownership of land, and simplified the question to the uttermost, so that it is impossible not to admit the wrongfulness of land-ownership - unless one simply stops one’s ears - but he was also the first to show how the question can be practically solved. He first gave a clear and direct reply to the excuses, used by the enemies of every reform, to the effect that the demands of progress are unpractical and inapplicable dreams.

Henry George’s plan destroys that excuse, by putting the question in such a form that a committee might be assembled tomorrow to discuss the project and to convert it into law. In Russia, for instance, the discussion of land purchase, or of nationalizing the land without compensation, could begin tomorrow; and the project might - after undergoing various vicissitudes - be carried into operation, as occurred thirty-three years ago* with the project for the emancipation of the serfs.

The need of altering the present system has been explained, and the possibility of the change has been shown (there may be alterations and amendments of the Single Tax system, but its fundamental idea is practicable); and, therefore, it will be impossible for people not to do what their reason demands. It is only necessary that this thought should become public opinion; and in order that it may become public opinion it must be spread abroad and explained - Which is just what you are doing, and is a work with which I sympathize with my whole soul, and in which I wish you success. [1897.]

* The Emancipation of the Serfs in Russla was decreed in 1861, and was accomplished during the following few years.

Tolstoy, Leo, Essays and Letters, Oxford University Press, 1911,

Chapter XV1 Letters on Henry George, pp 213 - 238