Popular Science Monthly/Volume 36/February 1890/Agriculture and the Single Tax
| AGRICULTURE AND THE SINGLE TAX. |
By HORACE WHITE.
I.
IN the second half of the eighteenth century there arose a school of thinkers in France to whom, at a later period, J. B. Say gave the name of physiocrats. The founder of the school was François Quesnay. Turgot was one of his disciples, and was the most distinguished member of the group. De Gournay, the elder Mirabeau, Morellet, and Dupont de Nemours are well-remembered names of the physiocratic school. Adam Smith was in Paris in the year 1764, and was much in the society of Quesnay and his friends. The exchange of thoughts among these great men must have been mutually beneficial, but the question that has since been raised and discussed with some heat, whether the author of the “Wealth of Nations” gained more from that intercourse than he gave in return, is a barren controversy.
At that time governmental interference with the business and livelihood of the people was incessant and almost universal, and was generally acquiesced in. The doctrine that money was the only form of wealth was held by nearly all statesmen and traders, and had resulted in the establishment of the so-called mercantile system. The physiocrats taught the contrary of both these conceptions. They held that governmental interference with the gainful occupations of the people was bad for both government and people, since it hindered the increase of wealth and the productiveness of taxes. They maintained that money was not wealth except in a secondary sense, as a tool and instrument of exchange, since all persons who acquire money find it for their advantage immediately to lay it out for other things. These two contentions of the physiocrats constitute their claim to the admiration of mankind.
They had another doctrine by which, as it has turned out, they are now more generally distinguished. They held that land was the only source of wealth, and that all occupations except agriculture were unproductive.
Agriculture, they said, yielded a “net product” over and above the wages of the cultivator during the time he was engaged in producing the crop. This net product went to the landlord, and might rightfully be taken by the Government to the extent necessary to defray the public expenses. They accordingly proposed and advocated the impót unique, or single tax, on the income derived from landed property. The residue of the net product remaining in the landlord's hands after the payment of taxes was, in their judgment, the annual and sole increment of the world's capital and stock in trade for the upbuilding of civilization.
All other trades, such as manufacturing and commerce, were sterile. These served as the clerks, the agents, the porters of agriculture. If any of these saved anything from their earnings as the handmaids of agriculture, competition would cut down their gains, so that eventually they would have nothing left over at the end of the year.
Adam Smith agreed with the physiocrats in their views respecting governmental interference with private business, and as to the true character and functions of money. He differed from them as to the “net product.” He held that land was not the sole source of wealth, but that all useful labor was to be reckoned, equally with agriculture, among the sources. His answer to the physiocrats is embraced in Chapter IX, Book IV, of the “Wealth of Nations.” Notwithstanding an occasional subsequent flicker, it may be said, speaking broadly, that if there ever was any economic conclusion upon which the world had agreed it was that the physiocratic doctrine of net product and single tax was erroneous.
II.
This consensus of opinion held good for something more than a century. In the year 1879 Mr. Henry George published his “Progress and Poverty,” in which he revived the single-tax idea with some variations. Mr. George says that he arrived at his conclusions by independent reasoning, without knowing anything of Quesnay or his doctrines (“Progress and Poverty,” p. 381). The only practical difference between Mr. George and the physiocrats is that he would take all the “net product” for public use, while they would take only so much as might be required for the purposes of economical government. There are differences of reasoning between them, but this is the only difference in results.[1]
Mr. George's latest commentator, Mr. Samuel B. Clarke,[2] allows that the net product may turn out to be a net deficiency as regards the full support of government. In one of his opening paragraphs he says:
“He (George) assumes, without conclusive evidence, that economic rent in the present state of this and every civilized country largely exceeds the amount required for necessary governmental expenses. The assumption, however, is not essential to his scheme. If the amount realized by the proposed tax would not support the Government, of course there would have to be taxes on other things; but the amount to be raised would be less by the amount of the land-value tax.”
If we could settle this question of the sufficiency of economic rent to sustain all the costs of government in advance of actual experiment, much would depend upon what we should call necessary governmental expenditures; much would depend also upon what we should take for the basis of economic rent. The latter is defined by Mr. Clarke as “the fair rental value of land exclusive of distinguishable betterments.” Buildings, fences, and growing orchards are distinguishable betterments. Perhaps roads and ditches made at the sole expense of the land-owners may be so considered. But are clearing, grubbing, breaking, marling, grading, and like ameliorations distinguishable? If so, we have Henry C. Carey's word for it that no farming district or county or township will sell to-day for as much as it has cost to bring it to its present state of productiveness. I do not agree with Mr. Carey in this. I only mention it to show what a chasm of divergence will open whenever the Government shall undertake to define distinguishable betterments and separate them from undistinguishable ones for the purpose of securing what Mr. Clarke calls “a firm foothold” for the inscribing of the fair rental value of each piece of land in the public accounts. Still, this difficulty may not be insuperable.
I propose to examine Mr. Clarke's pamphlet rather than Mr. George's book, because the former, although drawn almost wholly from the latter, embraces in small compass and with eminent fairness all that is needed to set out the single-tax argument, and does not lure us into by-ways as Mr. George often does.
“Why should land be singled out, and its holder made to bear a burden from which the owners of other sorts of property are exempt?”
This question is answered by Mr. Clarke, first on economical and then on ethical grounds. On economical grounds: “Because
(1) material progress in a community where absolute private property in land is maintained by law, acts, by force of that fact, like a wedge thrust midway into the social structure, to raise a few without effort or merit on their part, and to grind down the masses of men, however meritorious they may be; and because
(2) property in land being qualified in the way proposed, poverty will be abolished for that increasing class in civilized communities who are willing to work, but have few opportunities to do so advantageously.”
We are not authorized to infer from this statement that in a community where absolute private property in land is maintained by law, e. g., the United States, “a few” belonging to the landless class never get unduly elevated, or that land-owners never get ground down, in both cases regardless of merits, or out of all proportion to merits; nor can we infer that in a community where the state is the landlord, e. g., British India,[3] a few are never elevated and the masses never ground down, regardless of their merits respectively. But we may fairly demand that the writer shall point out his “few” before he asks us to accept his statement. Do land-owners in the United States get rich faster than other people? To say that the Astors are very wealthy, and that they have their counterparts as land-owners in all our lesser cities, does not answer the question, because the Vanderbilts, the Havemeyers, the Drexels, the Rockefellers, the Carnegies, the Armours, and the Pullmans are also very rich, and they do not own land to any large extent. Can anybody point to a similar group of rich men whose income is derived from agricultural land?
Any man of fair intelligence can answer the question for himself. The opportunity has been open to me, for example, to get rich by land-owning ever since I arrived at man's estate. It has been open to me to acquire land at all prices, from nothing per acre upward. I was once domiciled for a short time at a place where land was obtainable at the former price—good arable land, underlaid by a workable vein of coal. I filed an entry on one hundred and sixty acres of it at the United States Land-Office at Lecompton, Kansas; but, happening to receive an offer of twenty-five dollars per week to work on a newspaper shortly afterward, I abandoned my claim, and I am sure that I made no mistake in the point of view of dollars and cents. I took up my abode in the city of Chicago when there were only sixty thousand inhabitants there. The growth of that place has been, since that time, one of the remarkable phenomena in the world's history, and a great part of this growth took place under my eye; yet I have never seen the time when I thought I could make better use of my small capital by becoming a land-owner than by following other pursuits. But I have had some experience as a land-owner. The land that I have at one time and another owned, whether urban, suburban, or agricultural, or taken altogether, has not served me as well on the whole as other investments.
I make this personal reference because I know that my experience tallies with that of many others. Mr. Henry George, for example, has fairly earned all that he possesses of this world's goods. I venture to ask whether the same amount of labor, diligence, and foresight that he has bestowed upon his own vocation of book-writer, journalist, and publisher, if applied to the acquisition and use of land, would have netted him as much. Undoubtedly both he and I, by the use of hind-sight, can see where we might have made larger gains by becoming land-owners than we have ever made. But so, too, by the use of hind-sight we can see how we might have made as much or more in still other ways. We might have invented a telephone, for example.
Before proceeding it should be noted that Mr. Clarke expressly repudiates the idea that the single-tax argument rests upon the idea of an “unearned increment.” The rise in land values due to the growth of population has nothing to do with it, or at most only serves to set it in a more glaring light.
“The argument for the land-value tax” (he says) “is very apt to assume the form, and, if we may judge from current criticism, is quite generally understood to have the form, that because the value of land increases without effort on the part of the land-holders as the community grows, therefore the community has earned such value, and may justly take it for common purposes. In that form the argument is fallacious beyond question.”
Land, he shows, is subject to decrease as well as to increase of value, and other kinds of property increase or decrease in value quite independently of the owner's exertions, merits, or demerits.
The second economical reason why land should be singled out and its holder made to bear a burden from which the owners of other sorts of property are exempt, as stated in the quoted paragraph, is “because property in land being qualified in the way proposed, poverty will be abolished,” etc. No mode or process by which poverty is to be abolished being furnished, we are at liberty to infer that, if a marked addition were made to the land-tax all over the country, the poor would soon find themselves in easier circumstances; and that if successive additions were made, they would become more and more prosperous; and that when the whole rental value had been taken, there would be no poor people anywhere.
Now, taxes on land are paid by land-owners (I believe that Mr. George agrees to this). The proposition then is, that if land-owners were required to pay into the public treasury as much as they could by any possibility pay, other people would be so much benefited that even the poorest people in the world would be in comfortable circumstances.
The only way that this great change can be brought about is by the abolishment of all other taxes. I do not undervalue the relief that would accrue to industry from the abolition of indirect taxes. I hold that it should be the first step toward the elevation of the poor man, and the bettering of his condition, to let him have and enjoy what he earns—all of it, except just sufficient to keep him watchful of tax-eaters and tax-thieves.
But suppose that Divine Providence should bestow upon us rulers who could carry on government without any taxes whatever. Would that dispensation abolish poverty? Those who think so are bound to tell us how.
The single-tax philosophy does not propose to constitute a fund for general distribution. If anything should be left over after defraying all necessary expenses of government, the residue is to be applied to the common benefit and delectation through free libraries, music halls, picture galleries, higher education, etc. There is to be no alms-giving, because there are to be no poor. I take it that the utmost good to be derived from the exemption of all others than land-owners from taxation would be gained equally by any device or dispensation which should enable government to be carried on without taxes. I protest against the assumption that this would abolish poverty, unless those who hold that it would shall offer us something more conclusive than their private opinions.
III.
The ethical reason why land should be singled out exclusively for purposes of taxation is based upon what are called “natural rights.” I quote Mr. Clarke's words:
“The second answer, in substance, is: Because land is not rightfully the subject of absolute property, and because the injustice of allowing it to be so acquired and held will be remedied by the exaction and application to common uses of economic rent.
“The standard of right, to which this answer appeals, is that conception of inherent or underlying rights which is usually described, perhaps not altogether happily, by the phrase natural rights.”
General Francis A. Walker, in his “Land and its Rent,” disposes of the dogma of natural rights as applied by Mr. George with a few words of sarcasm, which really do embrace the true philosophy of the subject. He says that as he has never lived in the state of nature himself, but has passed his whole life in communities more or less civilized, he does not feel moved to discuss the subject on any other than economic grounds. According to my observation, more people of fair intelligence are taken in the single-tax net by this dogma than by all others together; and even when they are shaken from every other, they still cling to this as a sheet-anchor. It is worth while, therefore, and indeed necessary, to give some particular attention to it, in an elementary way.
Having cautioned us against the use of the phrase “natural rights” as not altogether happy, Mr. Clarke proceeds to use it twenty-one times in the next twenty pages, as though it were as happy as possible, assuming in all cases that every person born into the world has a natural right to land and a natural right to the best land—conditioned, however, upon every other person's equal right to the same land. The only way to make these conflicting natural rights effective is to confiscate economic rent through the taxing power.
What are “natural rights”? Let us test them for a moment by the Socratic dialogue, the interlocutors being A and B:
A. When you speak of natural rights, you mean rights according to nature, I suppose?
B. Undoubtedly.
A. And that the origin of such rights is traceable to the state of nature?
B. Certainly.
A. What would be the opposite of a state of nature, regarded as an origin of rights?
B. Art, convention, agreement, law.
A. Then the opposite of natural rights would be artificial, conventional, and legal rights?
B. Not the opposite exactly, but the counterpart and supplement of such rights.
A. But as to their origin only, you would say that the two origins were opposite to each other, the one being according to nature and the other not according to nature?
B. Yes, that would be a fair statement.
A. How do we learn whether anything is according to nature, so as to distinguish it from things not according to nature?
B. By observing what takes place in a state of nature.
A. So, if we saw a wolf devouring a sheep in a forest, we should say that it was the nature of wolves to kill sheep?
B. Of course.
A. But if we saw a dog guarding a flock of sheep and driving them into a sheep-fold at night, should we say that it was the nature of wolves to kill sheep, but the nature of dogs to protect them?
B. No, we should say that the dog had been trained to take care of sheep, although his ancestors had themselves been sheep-killers.
A. Why should we say this?
B. Because we know it by observation and testimony.
A. Do observation and testimony teach us that in a state of nature all men have equal rights?
B. We do not know exactly what is the state of nature applicable to man, since he has improvable faculties and is always changing, or is susceptible of change.
A. Yet the hypothesis is that equal rights are according to nature—that is, to man's nature. Are we to say that natural rights exist because there is no state of nature for man, as there is for dogs and wolves?
B. Although man has improvable faculties and is susceptible of change, and although his actual state of nature is hidden from us in the darkness of ages, before written language existed, yet it is possible to approximate toward the state of nature by observing what takes place among those tribes that are nearest to the state of nature.
A. And do we observe that among such tribes equal rights exist as to life or liberty, or any kind of property?
The colloquy would “naturally” come to an end at this point, because, in a state of nature, might makes right. The natural man takes what he wants, wherever he can find it. He takes the weaker man's wife or property, and kills or enslaves him, as the case may be.[4] It is safe to say that this has been the state of man in all countries “ere human statute purged the gentle weal.”
The village community, in which the land was held in common for the villagers (not for everybody), was the outgrowth of law, of art, of convention; but even this was subject to the law of the strongest, in the sense that every village community was liable to be dispossessed by any wandering tribe better armed, or more numerous or braver, that might suddenly emerge from the neighboring forest or mountain. The feudal system displaced the village community because the village could not protect itself against armed robbers.[5]
The recent searching examination of “natural rights” by Prof. Sumner[6] renders it unnecessary for me to go more deeply into this branch of the subject. What are commonly and loosely called natural rights are the outcome of centuries of hard knocks, the results of training, education, and experience, the very flower and last refinement of art as applied to society and government. Mr. Clarke cites certain decisions of the Supreme Court to show that natural rights have “their seat in the bosom of God and their voice in the harmony of the world,” to quote from Hooker's definition of law. But all such opinions are obiter to this discussion. That our ideas of natural rights, civilized though we be, change greatly in the progress of time, is proved by our own recent history, the right to liberty having been denied by a majority of Americans within our time.
Conjoined to the doctrine of natural rights, though not a necessary part of it, is the doctrine of equal rights, which I share as fully as anybody. But, if I attempt to draw generalizations from it, I am confronted by the fact that it is not universally held, but is really confined to a small portion of the human family. The Hindus, for example, hold that rights ought to be apportioned according to caste. In the Mohammedan world the doctrine of fate completely overtops and stifles the doctrine of equal rights. A considerable portion of the human race hold that women have no rights. A majority of the civilized races hold that woman's rights are inferior to man's rights, and we ourselves do not consider them embraced in the term “popular sovereignty.” Yet they are one half of the human race, and the more meritorious half.[7]
I shall assume, without further argument, that the rights of life, liberty, and property, including land, all rest upon experience, translated, after infinite trouble, conflict, and bloodshed, into law, and this notwithstanding any opinions of the Supreme Court that can be quoted to the contrary.
A title to anything, land or personal property, is defined to be “a just cause of exclusive ownership,” and a title-deed is the accepted evidence of the same. The law tells us what shall constitute just cause of exclusive ownership and what shall constitute good evidence of it. It is the same law, as to its origin, that fixes, prescribes, defines, and enforces all rights.
The law has prescribed in this country the following among other things: (1) That human life shall not be taken except in self-defense or by due process of law; (2) that private property shall not be taken for public use without just compensation; (3) that slavery or involuntary servitude shall not exist except as a punishment for crime—this is placed last because it was enacted last.
On the ground of salus populi suprema lex the state holds command over the lives and fortunes of its citizens, and to this sovereignty land forms no exception. The state may draft the citizen into its army or navy, and send him into battle where he may be killed. It may likewise take his landed property or his personal property. It is the sole judge of the occasions and the reasons. But it must act in accordance with its own constitution. It must not arbitrarily choose A, B, and C to go to the wars. It must not take private property without just compensation. If it does these things, it subverts itself and plunges into chaos.
There is no peculiar sacredness about land titles as distinguished from other titles. If the annual tax on land is not paid, the title is subverted at once. So, too, if a special assessment, or a mere water rate, is not paid, the land is sold, and a new title delivered to the purchaser, and this happens even if the non-payment is the result of accident. Personal property is liable to seizure and sale in like manner, and this is right, because the state must have the means of existence. All persons have had notice that such are the conditions of civilized life, the alternative to which is the feudal system, or the worse condition that went before it.
When we are told that the state could not divest itself of the right to resume possession of the land, we reply that it never has done so. It has only divested itself of the right to take it without just compensation. If any casuist puts himself back of the contract, and says it was wrong in the beginning and void ab initio, he has before him the immense task of turning the world over without a fulcrum; for the world, after an incalculable deal of shifting and balancing, has settled down to the belief that agreements made in writing should be kept.
Suppose we admit that there are two sides to the question, and that it is submitted to a jury from the moon. A holds that private property in land is a disadvantage to society, and should therefore be abolished without compensation to owners. B holds that it is an advantage to society, independently of constitutions and laws, and he shows in addition that a solemn agreement has been made that it shall not be abolished without compensation. Both advance such arguments as they may. A says (using the words of Mr. George in his speech at Brighton Beach, July 28, 1889):
“So monstrous is private ownership of land, so unjust is it—so ridiculous even is it, that a few men should be the owners of the element on which and from which a whole people must live—so clear is it that all men have by nature equal rights to the use of the land—that private property in land as we know it can only long continue where from the force of habit it is acquiesced in and never questioned. When it is thought about, when it is talked about, even when it is defended, it is doomed.”
B replies that “force of habit” is another name for human experience, and that it has stronger presumptions in its favor than anybody's inner consciousness; that the usefulness of land resides in its cultivation, and that no man can show from inner consciousness that better, or as good, cultivation would result from the abolition of private ownership; and that, if worse cultivation should follow, the whole human race would be sufferers. Would not the men from the moon say: “Gentlemen, your arguments are somewhat confusing. We perceive that private ownership of land, like most of your institutions, has advantages and disadvantages; but there is one fact about which no confusion exists, and that is, that men ought to live up to their agreements. We accordingly give our verdict to B. And we do this with the more confidence because we believe that, when the disadvantages become clearly preponderant, you will find a way to overcome them without shocking the moral sense of distant observers.”
IV.
Are the taxes on land in this country high enough or not? Is economic rent sufficient in amount to support government? We will consider these questions in their relation to agriculture.
The generally received idea of the single-tax party is that held by the physiocrats, that all wealth proceeds from agriculture, using that term to include all the products of the earth and the sea. This is a corollary of Mr. George's book, although I believe he has not explicitly affirmed it. I find an apt statement of it in the “Twentieth Century” of August 3d, viz.:
“Where all land is occupied, the annual rental value of the land of a nation is, theoretically, equivalent to its net annual production—that is, to the total production, less sustenance, interest, and replacement. This, through private land-ownership, is now all absorbed by a small number of individuals.”[8]
It is needless to say that mere space, which is not applied to the growing or gathering or mining of anything, is not to be included in the wealth-producing parts of the earth's surface, according to the physiocratic conception—such as lots in towns and cities. If all wealth comes from the earth by means of agriculture, mining, hunting, and fishing, why should not they pay all the expenses of government and a fund besides for the general use? Would not those industries, after such deductions, still be as well off as the industries which have no share in the land? Is not the whole of a thing equal to all of its parts?
It is true that man draws his sustenance from the earth, and that the annual surplus which takes the form of capital, of whatever sort, there has its start. But where does agriculture begin and end? It is commonly supposed to begin with the making of roads, the clearing of land, and the destruction of beasts of prey. But, before land can be cleared, tools must be made. Axes, plows, spades, wagons, bows and arrows, gunpowder perhaps, must be manufactured. And where does it end? All production is undertaken to satisfy man's wants. These are not satisfied when a bale of cotton has been picked or a ton of wheat gathered into a barn. The wheat must be ground into flour, the flour must be baked into bread, the bread must be carried to the consumer. All these processes require labor in countless forms in the production of machinery, buildings, tools, packages, and transportation. The bale of cotton must be packed, carried to and fro, spun, woven, and again carried to and fro. So of every product of the earth, without exception. All industry and all commerce are concerned in changing the forms and places of the products of agriculture, forestry, mines, and fisheries.
John Stuart Mill (“Political Economy,” Book I, Chapter II) asks why the grinding of corn should be considered a manufacturing employment, while the thrashing of it is agricultural. The only reason, he says, is that thrashing is usually done on the farm, while the grinding is done at a mill. Butter-making is counted an agricultural employment if it is done on the farm, but a manufacturing employment if it is done at a creamery. But it is the making of the butter, and not the place of making, that is the essential thing. Carry your imagination along all the ramifications of human industry to its farthest confines, and where can you find anything that is not analogous to the two related employments of the milk-maid and the butter-maker? Mr. Mill shows that the labor of astronomers, who help the sailor to find his way by the shortest paths over seas, carrying the farmer's products, is productive labor, and that whether it be called agricultural or not is of no importance to the sum total of the world's wealth. To draw a distinction, therefore, between agriculture and the manipulation and transportation of its products, as a source of wealth and taxes, is false reasoning.
Taxes must be apportioned among political units. The State of Connecticut is one such unit, and I choose this for present consideration because there has been a recent official examination of the profits of agriculture in that State, which enables us to see what economic rent amounts to in one of the most industrious and prosperous communities in the Union. It is embraced in the “Report of the Bureau of Labor Statistics for the year 1889.” Mr. Hotchkiss, the commissioner, has sought to make out as good a case for agriculture as possible, to show that it is not in a distressed condition, or not necessarily so. What is the showing of economic rent in Connecticut?
Six hundred and ninety-three farms were visited. Three hundred and fourteen report average profits of $362.88. Three hundred and seventy-eight report an average loss of $268.59. One reports neither loss nor gain. In this calculation the farmer's family support was reckoned as part of the farm expenses, which Mr. Hotchkiss thinks is improper, since, in reckoning the gains of other trades, it is customary to deal only with the profits and losses of the business by itself. Making this correction, he finds that six hundred and fifty farms make an average profit of $551.36, and that forty-two sustain an average loss of $232.45. The average size of the farms reported on was one hundred and ten acres.
I can not agree with Mr. Hotchkiss that the family expenses ought to be deducted in estimating the profits, unless an allowance is made on the other side of the ledger for wages of the family. The children of farmers begin to work as early as ten or twelve years of age. Therefore, the first cited computation of the profits of farming in Connecticut is the nearer to the truth. The footings, as summarized by the commissioner, are as follows:
| Total receipts from six hundred and ninety-three farms | $707,153 |
| Total expenses, including family support | 690,990 |
| Total profit | $16,163 |
Among the farm expenses we find the gross sum of $37,526 set down to taxes and insurance, but there is no separation of the taxes from the insurance. It is apparent that if the gross sum of $16,163 had been added to the tax bills of these farmers, it would have taken not only the whole of the economic rent, but the profits on their capital besides. The statistics in hand lead me to believe that the single-tax theory is already in operation in rural Connecticut, “unbeknownst” to its advocates—that is, that economic rent is wholly taken by the tax-gatherer from agricultural land plus something from the returns of the farmers' capital invested in live stock, implements, and “distinguishable betterments,” which the theory requires us to exclude from the list of taxables. Live stock, farming utensils, and wagons are shown in the report to be sixteen per cent of the farmer's capital, the real estate being eighty-four per cent. But the real estate includes buildings of every description, fences, drains, wells, and every kind of improvement.
If this is the true state of the case in one of the most densely populated States of the Union, where shall we look for the revenue that is to liberate all other industry from taxation and abolish poverty throughout the land? I know something about farming in the West, some years of my life having been spent on a farm in a then frontier State, where the conditions were substantially the same as those now prevailing in Dakota and Nebraska. I know that my step-father, the owner of the hundred and sixty acres under cultivation, had hard work to make ends meet in a very economical way, although he had a family of willing helpers. Tea and coffee were luxuries never seen in the household. Only one hired man was ever employed on the place, except in harvest-time. Thus the wages bill was kept down to a minimum. The yearly tax bill took the whole of the economic rent, if not more, just as it now does in Connecticut. I remember that my step-father was glad to resign his advantages as a land-owner and accept a salary of five hundred dollars per year in a town, in lieu of his chances of being lifted into affluence by “the wedge thrust midway into the social structure,” which Mr. Clarke pictures for us. I suspect that Mr. Clarke never worked on a frontier farm.
Between the extreme West and the extreme East I presume that instances of economic rent can be found in farming districts, but my observation teaches me that it is an insignificant affair in the total economy of the nation. When you have swept off all buildings and other distinguishable betterments, all live stock and other personal property, and when you have deducted fair wages, or if you please the family support of the farmer (generally of a very meager sort), the residuum of economic rent, I am very sure, will not be worth the trouble of confiscation.
If the single-tax theory prevails, what shall be done in those cases where economic rent is a minus quantity? According to the Connecticut report, three hundred and seventy-eight farms out of six hundred and ninety-three (fifty-four per cent) report no profits, but losses instead. Should they not be compensated in some way? Would it be fair for the state to take only the choice cuts of economic rent, and leave the bone and gristle? The least that it could do would be to abolish taxes on all land that yields no return to an industrious cultivator. Of course, there are good farmers and bad farmers. Some can make a living where others can not. But when the Government, in addition to all its other duties, takes up the task of separating all the distinguishable betterments of the country from all the land in the country, and rack-renting the land afterward, it will probably stop short of the task of discriminating between good farmers and poor ones. It would be obliged to stop taxing the non-profit-making farmers, if indeed it did not consider them entitled to some compensation out of the treasury for their labor. I do not see how otherwise the single tax would abolish the poverty of these three hundred and seventy-eight Connecticut farmers.
V.
The solidarity and interdependence of useful industry dispose of the complaint that all except land-owners are crippled and curtailed of their chance of earning a living. Says Mr. Clarke:
“A material thing is not rightfully the subject of absolute property if the appropriation of it by the exertion of one man's natural powers interferes with the equal right of other men to exert their natural powers. “The appropriation of land does so interfere. To test the principle, it will be proper to take for illustration a community like New York or Massachusetts, whose laws maintain private property in land, and in which all the land has been fenced in or substantially so; for such communities are numerous, and, as population increases, will become more numerous. In such a community, obviously, a landless man can not do anything individually. He can not obtain for himself food or clothing or shelter or fire; he is dependent upon other men for such alms or for such employment as they are willing to give him.”
When the fight against the English corn laws was in progress, it was urged by the protectionists that agriculture was the most meritorious of all employments, because it furnished food, without which man could not exist. I recall the apt reply of General Perronet Thompson, who said that, if you were to throw two men into the street, one without any products of agriculture and the other without any products of manufacture, there would not be much to choose between them. One of them would be hungry and the other naked. But the naked man would very soon be as hungry as the other, because he would have no tools to cultivate the land with, and if the temperature happened to be at zero the naked man would be frozen to death before the hungry man would be starved to death.
Mr. Clarke, I believe, makes his living by the practice of law, and, being a landless man, “can not do anything individually.” He is “dependent upon other men for such alms or such employment as they are willing to give him.” I, too, am in this plight. We two are therefore worse off theoretically than any of the Connecticut farmers whose pecuniary condition has been ascertained for us in the report of the Bureau of Labor Statistics. I say “theoretically,” but I suppose that actually the case is somewhat different. If we are dependent on farmers for food, they are dependent on us for law and newspapers. They might get on after a fashion without law and without newspapers, perhaps, but they could not get on without houses, clothing, tools, wagons, railroads, ships, medicines, etc., the producers of which in turn have need of law and newspapers. The only man who can do anything “individually” is Robinson Crusoe. Neither of us would care to swap places with him.
There are other economic formulas in the essay before us as unsubstantial as this, but space serves to notice only one more. The merit or demerit of this belongs to Mr. George, Mr. Clarke having merely condensed what Mr. George has set forth at greater length. It relates to land held for speculative purposes, and the argument is, that the single tax will wipe out this speculative element and thus benefit society. Thus, it is said: “A very great body of land would become substantially free, and all the people of this country would stand, so far as abundance of natural opportunities are concerned, where their predecessors stood sixty or eighty years ago.... Furthermore, the annihilation of the speculative element of value is likely to have a particular beneficial effect in and near large cities, where now the density of population presents a great and terrible and threatening problem, before which, hitherto, all the wisest and most humane of men have stood gasping and helpless." Capitalists, it is contended, would hasten to erect comfortable houses for rent on vacant city and suburban lots "if, from the value of such lots, the speculative element were excluded. Houses would compete for men, instead of men cutting each other's throats, as now, in the competition for houses."
The first result of the application of the single-tax principle would be to discharge from taxation all unoccupied land in both city and country. The value, or rent-yielding quality, having been seized by the state, nobody would be so foolish as to pay taxes on property which neither now nor hereafter could bring him any return. All such holdings would be abandoned to the state, and this is exactly what is intended. Of course, the state would not tax its own property.
Then the state would say to capitalists, "You can build on this land on condition of paying ground-rent, and you will receive such interest on your capital invested in bricks and mortar as the law of competition will allow." But that is what capitalists can do now. By paying ground-rent they can build as much as they please. How is building to be expedited by changing the landlord? In fact, it would be retarded. At present the land-owner is spurred on to improvement by the hope of gaining a ground-rent and by the imposition of a yearly tax on his property, which he must pay whether it yields any return or not. Both these incentives would be wanting if the land were owned by the state.
How would it be with agricultural land held for speculative purposes? The state would say to the would-be farmer, "You can cultivate this land by paying the rent which neighboring land pays." But can not the farmer get the same land now on the same terms? Show me the owner of unfilled agricultural land who refuses to allow his acres to be cultivated at a fair rental. I can show plenty of such land within one hundred miles of New York, and all over New England, which any cultivator can have the use of, without paying any rent at all, on condition of cultivating it. Surely the state would not offer land on more favorable terms. It would not let the land, rent free, and furnish the capital to cultivate it also. In short, no new opportunities for the cultivation of land would exist unless the state should offer better terms than present owners offer. But this the state could not do without sacrificing the fundamental principle of the single tax, which is that the occupier shall pay the full economic rent.
It is the testimony of all observers that, of two men of equal endowment cultivating land, the one being the owner and the other only a tenant, the owner makes the best use of the land, gets the largest crops, has the best cattle and the best orchard, and in all ways takes the best care of the property. The reason is very simple. It is because all the labor, skill, and economy bestowed upon the land enure to his own advantage. The net results belong to him, and this is sufficient reason for the employment of his best powers and for the practice of the utmost frugality. Capital arises from the exercise of industry and frugality. It is for the interest of the state that capital should be created. The system of land tenure which offers the greatest inducement to the creation of capital is the one most conducive to the public interest.
Again, the private ownership of land tends to stability in institutions. The ideas which gather about the word home are the most precious, both to the individual and to the community, that we are able to conceive of. A man will ordinarily undergo greater hardships, practice more self-denial, exercise more of the virtues which go to the upbuilding of the commonwealth, in order to secure a home, than to accomplish any other object. This is what his mind is first set on, and when he has gained it his efforts are equally enlisted to keep it. The single tax threatens to profoundly alter the meaning of this word as we understand it. It is not consistent with the idea of home that somebody should take it away from us by bidding at an auction. If it be said that no such auction would take place, but that the state would fix the tax at a rate previously ascertained as sufficient to take the economic rent, differing from the present tax only in amount, then we say that there is no means of ascertaining what the economic rent is. It would be possible to form an approximate estimate at the beginning by taking as a standard the rents paid by individuals for the use of land as a matter of bargain. But the standard would only serve for the first renting. What about the second? Land values change. It is the aim of the single tax to gather in the values that grow with the progress of society. A large part of Mr. George's argument is addressed to the coming time when all available land shall be appropriated. Renting by auction is the only process that will enable society to collect economic rent surely, equitably, progressively, and scientifically.
I have no apprehension that the single-tax theory will ever get beyond the argumentative stage in this country, or in any country where small ownership is the characteristic feature of agriculture. The land-owners have so many stakes in the country, and these are driven so firmly, and woven together so tightly, that no revolution can gain head which has for its aim to dispossess them of their homes and acres, or to unduly tax them.
No evidence exists showing or tending to show that agricultural land in the United States is capable of yielding any considerable amount of public revenue above what it now yields under the tax laws of the several States. Evidence corroborating that cited from the Connecticut Bureau of Labor Statistics has been supplied lately in a rapidly swelling stream, especially in the official publications of the Commissioners of Vermont and New Hampshire, where there are literally tens of thousands of acres of abandoned lands, which were once the homes of thrifty farmers, and which can now be had for no greater price than the present value of the improvements thereon. A remarkable letter from Judge Nott, of the United States Court of Claims, in the “Nation” of November 21, 1889, presents facts and reasoning thereon, which, whatever else may be said, show conclusively that in the fairest parts of agricultural New England there is nothing left for the single tax to sweep into the public treasury. In the presence of such facts, how idle is it for disputants to cull figures out of the census reports, as Mr. Shearman does in the “Forum” article previously cited, to show what was the value of farms in 1880, and what annual percentage they ought to yield—like measuring a man for clothes, at the distance of a mile, with a theodolite!
There is no subject more bedeviled with dogmatism than taxation. There is none in which dogmatism is less helpful. The more study one bestows upon it the less will he be inclined to lay down inflexible rules. While justice should be ever in the mind's eye, yet our conclusions must always be mainly experimental. Of all the dogmas on taxation the single tax on land is the most dogmatic, and the one least favored by experiment, so far as experiment has been made. In India the single tax has been in force from the earliest times, supplemented by other taxes only after economic rent had been exhausted. During the last half-century British India has been well governed, so that whatever blessings the single tax has in hiding ought there to have been disclosed. That it has not abolished poverty, or exhibited any tendency to do so, may be confidently affirmed.
There are some hundreds of professors of political economy in the colleges and universities of the civilized world. They are of various schools, including that of state socialism. Some are conservatives, others progressives, still others may be called radicals. They are men who have somehow got themselves recognized as fit to instruct others in the principles of the science which deals with the production and distribution of wealth, with land, labor, capital, interest, taxes, etc. Of course, they have all had their attention called to the single-tax doctrine. It has been “in the air” for ten years, and it is their business to know all the discoveries in their science, just as it is that of astronomers to know all the finds of new comets and satellites. If any one of them, either in Europe or America, has given his adhesion to the doctrine, I have not heard of him. All who have taken the trouble to give any opinion about it have spoken adversely. It can not be said that they are afraid to speak their real sentiments; most of them are free-traders, and nothing has been more unpopular than free trade, although that tide appears now to be turning. If the single tax contains the germ of truth, is it not a little remarkable that no member of the profession should have perceived and acknowledged it?
- ↑ In the “Forum,” September, 1889, Mr. Thomas G. Shearman, one of the most distinguished members of the single-tax party, holds that it is not necessary to push the single tax beyond necessary governmental expenses. The absorption of the entire ground-rent, he says, “is not a practical question at present, and will not be for a long time to come, if ever.” This marks the recent divergence between Mr. George and the “Standard” on the one hand, and the Rev. Mr. Pentecost and the “Twentieth Century” on the other. With the latter the single tax is a cult; with the former it is now only an economic doctrine, or at most a “pious opinion.” But certainly “Progress and Poverty” teaches a cult, if it teaches anything.
- ↑ “Current Objections to the Exaction of Economic Rent by Taxation considered,” by Samuel B. Clarke, of New York; pamphlet edition, 1889.
- ↑ De Laveleye, in his work on “Primitive Property,” gives the reason for holding that the state is the real landlord in India. “Where the land-tax rises so high,” he says, “as to absorb nearly the whole produce and to leave the cultivators only the bare means of subsistence, it is obviously an actual rent that is paid; and if it is the state that receives such a tax, it may be considered as the true proprietor.”
- ↑ The movement now in progress for the suppression of the African slave trade has shed an abundance of light (if any more were needed) on the subject of “rights” as they actually exist in the state of nature. The prime difficulty there is not Arab slave-dealing, but the practice prevailing among the native tribesmen of enslaving each other for the purposes of human sacrifice in their religious ceremonial. Arab slave-dealing is not the cause of African slavery, but merely an adjunct to it.
- ↑ “Not to be killed,” says Stendhal, “and to have a good sheepskin coat in winter, was, for many people in the tenth century, the height of felicity”; let us add, for a woman, that of not being violated by a whole band. When we clearly represent to ourselves the condition of humanity in those days, we can comprehend how men readily accepted the most obnoxious of feudal rights, even that of the droit du seigneur. The risks to which they were daily subject were even worse. The proof of it is that the people flocked to the feudal structure as soon as it was completed. In Normandy, for instance, when Rollo had divided off the lands with a line, and hung the robbers, the inhabitants of the neighboring provinces rushed in to establish themselves. The slightest security sufficed to repopulate a country. (Taine's “Ancient Regime.”)
- ↑ “Popular Science Monthly,” July, 1889.
- ↑ Jeremy Bentham has given an analysis of the phrases in common use which are synonymous with law of nature, such as moral sense, common sense, law of reason, natural justice, natural equity, and fitness of things. “Common sense,” he says, “means a sense of some kind or another which the author affirms is possessed by all mankind; the sense of those whose sense is not the same as his being struck out of the account as not worth taking... . If such a man,” he adds, “happens to possess the advantages of style, his book may do a considerable deal of mischief before the nothingness of it is understood.” (“Principles of Morals and Legislation,” chap, ii.)
- ↑ I do not find any explanation of the word “theoretically,” but I suppose that it was not used without a purpose. Theoretically a man who owns the only coal mine on the line of a railroad has a valuable monopoly, but it may turn out practically that he only has the privilege of working it on terms fixed by the railroad. I can point to cases of this kind.