1 + 2 adds up!

These two interesting quotes assist to make the Georgist case that land prices and taxes are both problematical:-

(1) Richard Cobden: “Cheated, Robbed and Bamboozled”

“I warn ministers, and I warn landlords and the aristocracy of this country, against forcing on the attention of the middle and industrial classes, the subject of taxation ….. If you were to bring forward the history of taxation in this country for the last 150 years, you will find as black a record against the landowners as even in the Corn Law itself.

I warn them against ripping up the subject of taxation. If they want another league at the death of this one – if they want another organisation and a motive – then let them force the middle and industrial classes to understand how they have been cheated, robbed and bamboozled …..

For a period of 150 years after the conquest, the whole of the revenue of the country was derived from the land. During the next 150 years it yielded nineteen-twentieths of the revenue. For the next century down to the reign of Richard III it was nine-tenths. During the next 70 years to the time of Mary it fell to about three-fourths. From this time to the end of the Commonwealth, land appeared to have yielded one-half the revenue. Down to the reign of Anne it was one-fourth. In the reign of George III it was one-sixth. For the first thirty years of his reign the land yielded one-seventh of the revenue. From 1793 to 1816 (during the period of the land tax), land contributed one ninth. From which time to the present one twenty-fifth only of the revenue of the revenue had been derived directly from land.

Thus, the land, which anciently paid the whole of taxation, paid now only a fraction, or one twenty-fifth, notwithstanding the immense increase that had taken place in the value of the rentals. The people had fared better under despotic monarchs than when the powers of the state had fallen into the hands of a landed oligarchy who had first exempted themselves from taxation, and next claimed compensation for themselves by a corn law for their heavy and peculiar burdens.”

  • Richard Cobden: Parliamentary Corn Law debates [1845]

(2) Professor Thorold Rogers on living costs:

“I have stated more than once that the fifteenth century and the first quarter of the sixteenth were the golden age of the English labourer, if we are to interpret the wages which he earned by the cost of the necessaries of life. At no time were wages, relatively speaking, so high, and at no time was food so cheap. Attempts were constantly made to reduce these wages by Act of Parliament, the legislature frequently insisting that the Statute of Labourers should be kept.  But these efforts were futile; the rate keeps steadily high, and finally becomes customary, and was recognised by parliament.  It is possible, that as the distribution of land for terms of years became habitual, the phenomenon of which has often been noted of peasant proprietorship, a high rate of wages paid to the free labourer, may have been exhibited in the period on which I am commenting.”

  • James E Thorold Rogers: Six Centuries of Work and Wages: The History of English Labour, T Fisher Unwin, London 1912, Eleventh Edition, p.326

3 Comments

  1. Chris O’Neill13-06-2017

    The people had fared better under despotic monarchs than when the powers of the state had fallen into the hands of a landed oligarchy

    The story of democracy from the middle ages until relatively recently has been about the landed oligarchy obtaining their democratic rights from the monarch, the American Revolution for example.

  2. Bryan Kavanagh13-06-2017

    The two cited pieces and the chart demonstrate that the vast majority of English people were freer and had greater disposable income from the XV Century to the first quarter of the XVI than since that time. At the peak, the unskilled labourer had two-thirds of his income left after providing for food, clothing and shelter, and the skilled carpenter was much better off again. They may not have had cars nor TV, but they were able to have sons and daughters educated and married with their disposable income without going into debt. Importantly, until taxation on their labour was increased and land prices began to grow (because the land rent was no longer captured publicly), most had no debt at all. i.e. Wage slavery was unknown, and a three day week existed for part of that time. Some say that was a result of the Black Death, and workers being short for the aristocracy and others, but that is not the case. That particular bubble is evident in the IV Century.

    I don’t advocate a return to the XV Century, but there are lessons for languishing economies: we tax wages and profits instead of land, so there are tax advantages in investing in real estate, even though this generates a repetitive series of bubbles in land prices which burst into recessions, and real wages tend to decline as a result. With wages declining and debt building up, it is little wonder world economies are failing. Curiously, although the facts show otherwise, most people believe they are being ‘got at’ with rates and land taxes but, clearly, this historical data proves that taxing labour and capital is an existential problem for us – as are bubbles in land prices. We could reverse this by capturing more land ‘rent’ and removing many counter-productive taxes – as advocated by The Henry Tax Review.

  3. Chris O’Neill13-06-2017

    most people believe they are being ‘got at’ with rates and land tax

    What people need to come to realise is that nearly all the price of land in places like Sydney and Melbourne is economic rent that is paid to the vendor when he sells, a.k.a. a private tax paid to the vendor.

    People are all too willing to whine about government taxes but they just don’t see that most of the money they hand over to vendors is a tax being collected for the vendors.

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