100% is not enough: Georgism to its logical conclusion

Henry George recommended a single, 100% tax on the unimproved value of land. Here I'll attempt to show the insufficiency of that remedy using only his own premises.

Premise 1: The all-devouring rent thesis
George viewed the landlord as the “robber that takes all that is left...save just enough to enable the victim to maintain life and come forth next day to work”. (Protection or Free Trade) Here we see a kinship between Marxian surplus value and Georgian ground rent. The only difference is that, whereas Marx named capital the robber of labor proper, George, who identified the capitalist with the labor embodied in his capital, named the landlord the robber of both labor and capital, ground rent devouring both the wage and the interest on capital.

Premise 2: The fallacy of compensation
In a chapter of Progress and Poverty entitled "Claim of Landowners to Compensation", George addressed just that: those of his critics who wanted landlords to be compensated as part of any collectivization scheme like his. Such critics had pointed out that some landlords are new landlords, having earned their fortunes “honestly” (i.e. not by ground rent). George's response was that compensation would merely take from the community upfront fully what ground rents would have taken over time, thus defeating the purpose. The fallacy of compensation is thus the mistaken identification of the problem as ground rent per se, when it is in fact any distributive injustice owing to ground rent, in this case the capitalization of land on the basis of future ground rent.

But what about past ground rents? Have they not resulted in distributive injustice? Future ground rents are in current land values, but where are past ground rents currently? Well, if Premise 1 is correct, they're everywhere, accounting for all capital. For how can the laborer, left with only the means of maintaining his labor power, or even the capitalist, left with only the means of maintaining his capital, find the means to invest in the creation of new capital? Premise 1 means that the origin of all capital is ground rent, and thus a landlord becoming a capitalist (the reverse of the “honest” landlord above). And thus the capitalist has no more legitimate a right to his capital than the landlord has to his land or, what's the same, compensation for being dispossessed of it. George's critics were correct--to single out landlords would be unjust--not because some landlords are ultimately not landlords, as his critics argued, but because every capitalist is ultimately a landlord.

That's all fine and well as a theory, but without motivation for personal gain there is no progress. Not even adequate maintenance. The result of dis-ownership is embodied by such events as the great Russian oil spill(s) which continue to contaminate huge swaths of land, and the Chernobyl disaster. Result- no more land to rent.

Manny said:

That's all fine and well as a theory, but without motivation for personal gain there is no progress. Not even adequate maintenance. The result of dis-ownership is embodied by such events as the great Russian oil spill(s) which continue to contaminate huge swaths of land, and the Chernobyl disaster. Result- no more land to rent.

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Oil spills and nuclear meltdowns occurred in the West, too, and continue to. Soviet land was owned collectively by the people (or the party, depending on who you ask), like a corporation is owned collectively by its stockholders (or its executives, depending on who you ask), not dis-owned like the ozone layer. But your point may in sense be valid. That is, George's remedy did allow the owner to abandon his land, and nothing in my readings (perhaps a true scholar can correct me here) indicates that George considered him in such case to be liable for any diminution of the land's value (without which liability abandonment is indeed dis-ownership) during his tenure. George spoke much about improvements to land, like the rest of the classical economists, land spoilage not so much. But that is all the more reason that his remedy was insufficient; land (as all means of production) must be collectivized in the form of collectivization, not of tax.

Tim the plumber said:

This Henry George bloke had not heard of the concept of supply and demand then. Idiot. Obviously.

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The law of supply and demand certainly contradicts the all-devouring rent thesis, but it doesn't contradict the fact that ground rent (and hence its investments) is unearned. Nor does it contradict that a 100% tax on ground rent wouldn't be distortionary, a fact even Milton Friedman admits.

The Minimalist said:

Oil spills and nuclear meltdowns occurred in the West, too, and continue to.

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True of course, but they happen for different reasons. The point I was making was they happened in USSR because of poverty and neglect. The neglect comes from a lack of motivation. In order to make people strive for excellence there needs to be incentive.

Nobody wants to go to Siberia to do the ****ty, hard job of inspecting and fixing areas where this is a potential leak. Nobody cares enough to check that the work was actually done, not just signed off.

What I've seen of unions, when a person knows they won't get a bigger raise or bonus for doing outstanding work, and when they know they won't get fired or even suspended, for neglecting their work, for absenteeism, not following protocols or what have you, they will try and do as little as possible. Just the bare minimum to keep themselves employed. The union shop culture is disenfranchised. In fact those who do try and go above and beyond doing just the bottom line are discouraged from doing so by the others, for setting a standard that might become expected of everyone. Despicable behaviour. This is personal experience talking. This explains why unionized labour forces in Canada and the US typically produce sub-standard goods at a lower volume and higher cost. North American auto makers. Also, hospitals, schools and government workers in Canada which are generally unionized.

Marx's ideas are interesting but history has shown that communism is inferior, because of human nature. IE it is vulnerable to laziness and corruption.


George's remedy did allow the owner to abandon his land, and nothing in my readings (perhaps a true scholar can correct me here) indicates that George considered him in such case to be liable for any diminution of the land's value (without which liability abandonment is indeed dis-ownership) during his tenure. George spoke much about improvements to land, like the rest of the classical economists, land spoilage not so much. But that is all the more reason that his remedy was insufficient; land (as all means of production) must be collectivized in the form of collectivization, not of tax.



The law of supply and demand certainly contradicts the all-devouring rent thesis, but it doesn't contradict the fact that ground rent (and hence its investments) is unearned. Nor does it contradict that a 100% tax on ground rent wouldn't be distortionary, a fact even Milton Friedman admits.[/QUOTE]

The Minimalist said:

Henry George recommended a single, 100% tax on the unimproved value of land. Here I'll attempt to show the insufficiency of that remedy using only his own premises.

Premise 1: The all-devouring rent thesis
George viewed the landlord as the “robber that takes all that is left...save just enough to enable the victim to maintain life and come forth next day to work”. (Protection or Free Trade) Here we see a kinship between Marxian surplus value and Georgian ground rent. The only difference is that, whereas Marx named capital the robber of labor proper, George, who identified the capitalist with the labor embodied in his capital, named the landlord the robber of both labor and capital, ground rent devouring both the wage and the interest on capital.

Premise 2: The fallacy of compensation
In a chapter of Progress and Poverty entitled "Claim of Landowners to Compensation", George addressed just that: those of his critics who wanted landlords to be compensated as part of any collectivization scheme like his. Such critics had pointed out that some landlords are new landlords, having earned their fortunes “honestly” (i.e. not by ground rent). George's response was that compensation would merely take from the community upfront fully what ground rents would have taken over time, thus defeating the purpose. The fallacy of compensation is thus the mistaken identification of the problem as ground rent per se, when it is in fact any distributive injustice owing to ground rent, in this case the capitalization of land on the basis of future ground rent.

But what about past ground rents? Have they not resulted in distributive injustice? Future ground rents are in current land values, but where are past ground rents currently? Well, if Premise 1 is correct, they're everywhere, accounting for all capital. For how can the laborer, left with only the means of maintaining his labor power, or even the capitalist, left with only the means of maintaining his capital, find the means to invest in the creation of new capital? Premise 1 means that the origin of all capital is ground rent, and thus a landlord becoming a capitalist (the reverse of the “honest” landlord above). And thus the capitalist has no more legitimate a right to his capital than the landlord has to his land or, what's the same, compensation for being dispossessed of it. George's critics were correct--to single out landlords would be unjust--not because some landlords are ultimately not landlords, as his critics argued, but because every capitalist is ultimately a landlord.

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The owner of property has a moral right to charge for its use. Thus why property taxes are immoral, since it involves the government falsely claiming ownership of property, and making the legitimate owner a renter.

This notion that landlords are entitled to nothing is depraved Communist nonsense.

Manny said:

That's all fine and well as a theory, but without motivation for personal gain there is no progress. Not even adequate maintenance. The result of dis-ownership is embodied by such events as the great Russian oil spill(s) which continue to contaminate huge swaths of land, and the Chernobyl disaster. Result- no more land to rent.

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That's all fine and well as a theory, too. Shared ownership and collective progress was how most human civilizations operated for most of human history. That's how humanity survived long enough to invent greed.

Paschendale said:

That's all fine and well as a theory, too. Shared ownership and collective progress was how most human civilizations operated for most of human history. That's how humanity survived long enough to invent greed.

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Being a revisionist doesn't make you right.

Paschendale said:

That's all fine and well as a theory, too. Shared ownership and collective progress was how most human civilizations operated for most of human history. That's how humanity survived long enough to invent greed.

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I dont know if greed was invented, or came later but that is the problem, which undermines society in any case and which communism does not address. Communism naively believes that by elliminating food, people wil no longer feell hungry. Capitalism on the other hand makes use of greed as a positive motivation. Neither one is perfect...

Manny said:

I dont know if greed was invented, or came later but that is the problem, which undermines society in any case and which communism does not address. Communism naively believes that by elliminating food, people wil no longer feell hungry. Capitalism on the other hand makes use of greed as a positive motivation. Neither one is perfect...

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I don't think anyone has ever made that argument besides extremist Hindus or Buddhists. Certainly not any western communists or socialists.

Paschendale said:

I don't think anyone has ever made that argument besides extremist Hindus or Buddhists. Certainly not any western communists or socialists.

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Sorry, it was a metaphor for thinking that by removing ownership of land etc., the problem of greed goes away.

Manny said:

Nobody wants to go to Siberia to do the ****ty, hard job of inspecting and fixing areas where this is a potential leak. Nobody cares enough to check that the work was actually done, not just signed off.

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But Russia has redeemed itself; it is a capitalist Russia that is failing now.

Manny said:

What I've seen of unions, when a person knows they won't get a bigger raise or bonus for doing outstanding work, and when they know they won't get fired or even suspended, for neglecting their work, for absenteeism, not following protocols or what have you, they will try and do as little as possible. Just the bare minimum to keep themselves employed. The union shop culture is disenfranchised. In fact those who do try and go above and beyond doing just the bottom line are discouraged from doing so by the others, for setting a standard that might become expected of everyone. Despicable behaviour. This is personal experience talking. This explains why unionized labour forces in Canada and the US typically produce sub-standard goods at a lower volume and higher cost. North American auto makers. Also, hospitals, schools and government workers in Canada which are generally unionized.

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You're leaving out leisure, that most valuable good. Also, you're singling out labor unions, when there are also capital unions, trusts and indeed the aforementioned corporation itself. All these unions, including labor unions, are a natural consequence of capitalism, so they serve my argument, not yours. The difference between capitalism and socialism is not that one is unionized and one is not, but rather that socialism, true socialism, is a union of equal persons as opposed to fictitious capitals.

Manny said:

Marx's ideas are interesting but history has shown that communism is inferior, because of human nature. IE it is vulnerable to laziness and corruption.

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Why? Because collectivization failed to turn an essentially third word country into a paradise? Implicit and often explicit in the "Communism may be theoretically sound, but look at the results" argument is a comparison with the West, though Russia wasn't on par with the West to begin with. Indeed, the comparison itself speaks to the power of collectivization, in this case turning a pre-industrial backwoods into a real contender.

Paleocon said:

This notion that landlords are entitled to nothing is depraved Communist nonsense.

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What's sense got to do with it? You just decided the landlord has a right to his land, without anything in the way of logical proof. That is the definition of nonsense.

The Minimalist said:

But Russia has redeemed itself; it is a capitalist Russia that is failing now.

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What we see in Russia now is still the vestiges of Communism, which is a problem of rampant gangsterism. In theory there was communism. In reality there was a vast underground black-market, since the only way to acquire what people wanted and needed was through crime. This systemic lawlessness gave rise to powerful criminal organizations that still dominate Russia today.

The Minimalist said:

You're leaving out leisure, that most valuable good. Also, you're singling out labor unions, when there are also capital unions, trusts and indeed the aforementioned corporation itself. All these unions, including labor unions, are a natural consequence of capitalism, so they serve my argument, not yours. The difference between capitalism and socialism is not that one is unionized and one is not, but rather that socialism, true socialism, is a union of equal persons as opposed to fictitious capitals.

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Not saying capitalism is perfect, by a long shot because it thrives on exploitation. For this reason we have the rise of socialism in response to mechanization and mass-production. Without unions, labourers have no power to protect themselves against the ruling classes. But in the USSR ruling classes continued to exist and enjoy their privilege. The reality of soviet experience was that 'bourgeoisie' classes always found a way to give themselves the advantage, through political alliance and manipulation of law, or through crime. Trotsky understood this and called for permanent revolution. But can you imagine, a society undergoing constant upheaval and revolution every 20 years, all for the sake of maintaining 'equality', which was in actual fact an illusion, or rather, the equality of poverty? What exactly is the point of such social engineering experiments if the consequences are continual instability?

In the end, people are happy with reasonable peace and prosperity, even if it means there must be a ruling class that enjoys such opulence. As long as there is bread on the table, social stability and some freedom. The differences are more than philosophical.

The Minimalist said:

Why? Because collectivization failed to turn an essentially third word country into a paradise? Implicit and often explicit in the "Communism may be theoretically sound, but look at the results" argument is a comparison with the West, though Russia wasn't on par with the West to begin with. Indeed, the comparison itself speaks to the power of collectivization, in this case turning a pre-industrial backwoods into a real contender.

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Becuse you are glossing over the reality of what happened, that people had to be forced into doing the work which the government put upon them, since they were reluctant because they gain little. Those who had to do the hard labour did not benefit any more than those who did less, there were no tangible rewards. Love of motherland has its limits, it seems. Fact is they became what they are now on the forced labour of the people, who suffered for naught.

"Forced labour was a vital part of the rapid industrialization and economic growth of the Soviet Union. Between 1932-1946 the Soviet secret police detained approximately 18,207,150 prisoners. The Gulag prison system had put into practice the use of forced labour by imprisoning not only dangerous criminals but also people convicted of political crimes against the communistic government.

Prisoners were forced to work extremely strenuous labour for up to 14 hours in a single day. Prisoners did jobs like forestry work with saws and axes,they mined ore by hand where often they suffered painful and fatal diseases from inhalation of ore dust. They also had to dig at frozen ground with primitive pickaxes for construction, construction of defensive lines, creating railroads, and creating large canals like the workers in Belbaltlag, which is a Gulag camp where the prisoners would work on building the White Sea-Baltic Sea Canal. Prisoners were meagrely fed and could barely sustain these hard working conditions and freezing cold climate. Typically about thirty percent of the labour force was too sick or weak to work but were punished if they did not show up to perform the labour, thus it was not uncommon for prisoners to drop dead on the job."
Forced labor in the Soviet Union - Wikipedia, the free encyclopedia

There is your wonderful communism in action. It's not nice to tell people only half the story. The system which you endorse here means, either become a slave of state or go to the Gulag.

The Minimalist said:

But Russia has redeemed itself; it is a capitalist Russia that is failing now.



You're leaving out leisure, that most valuable good. Also, you're singling out labor unions, when there are also capital unions, trusts and indeed the aforementioned corporation itself. All these unions, including labor unions, are a natural consequence of capitalism, so they serve my argument, not yours. The difference between capitalism and socialism is not that one is unionized and one is not, but rather that socialism, true socialism, is a union of equal persons as opposed to fictitious capitals.



Why? Because collectivization failed to turn an essentially third word country into a paradise? Implicit and often explicit in the "Communism may be theoretically sound, but look at the results" argument is a comparison with the West, though Russia wasn't on par with the West to begin with. Indeed, the comparison itself speaks to the power of collectivization, in this case turning a pre-industrial backwoods into a real contender.



What's sense got to do with it? You just decided the landlord has a right to his land, without anything in the way of logical proof. That is the definition of nonsense.

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I didn't decide that. Property rights originated ages ago.

Manny said:

What we see in Russia now is still the vestiges of Communism, which is a problem of rampant gangsterism. In theory there was communism. In reality there was a vast underground black-market, since the only way to acquire what people wanted and needed was through crime.

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Vestiges? The oligarchs were the prime beneficiaries of privatization; they're more powerful now than they ever were before it. Nor is it necessary to invoke their criminality to explain why they divert government policy to their interests in the manner of American corporations. Also, the black markets were a response to a protectionist policy that was, largely because of the hard money-based economy, excessive of the state's ability to enforce it, not socialism. George was anti-protection (hence the title of the first book I cited), as have been international socialists generally, including Marx. And Soviet protection extended to products whose import bans could not be explained by the need to nurture nascent industries. Such protection was rather motivated by the Cold War, which in turn was initiated by the West (in the form of a hot war: the immediate military invasion against the revolution, which no doubt contributed to what Marx called "barracks communism" and what you confuse with communism or even collectivism in the broad sense).

Manny said:

The reality of soviet experience was that 'bourgeoisie' classes always found a way to give themselves the advantage, through political alliance and manipulation of law, or through crime. Trotsky understood this and called for permanent revolution. But can you imagine, a society undergoing constant upheaval and revolution every 20 years, all for the sake of maintaining 'equality', which was in actual fact an illusion, or rather, the equality of poverty?

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Following Marx, Trotsky's "permanent revolution" was not an endless series of domestic political revolutions. It was rather continuous proletarian resistance to the attempt of the bourgeoisie to fully realize their own revolution by dissolving the united proletariat, which according to Trotsky was represented by the state prior to Stalin. But in order for that resistance to be successful in an underdeveloped country like Russia, Trotsky argued, revolutions would have to occur internationally relatively quickly.

Manny said:

In the end, people are happy with reasonable peace and prosperity, even if it means there must be a ruling class that enjoys such opulence. As long as there is bread on the table, social stability and some freedom. The differences are more than philosophical.

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To quote The Edukators, "Look around...anybody look happy to you?" One should be cautious about confusing a failure to overcome the coordination and military barriers to revolution with consent, especially when surveys show consistently overwhelming disapproval of the corporate state.

Manny said:

Becuse you are glossing over the reality of what happened, that people had to be forced into doing the work which the government put upon them, since they were reluctant because they gain little. Those who had to do the hard labour did not benefit any more than those who did less, there were no tangible rewards.

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The idea that there was equal pay in the Soviet Union is a myth (indeed, those Communists who advocated equal pay were derided by Bolsheviks as "Bordigists"). The incentive to shirk came rather from the "transitional" (i.e. pre-socialist) policy of full employment; because there was no reserve army of miserable workers-in-waiting like there is here, workers were difficult to replace and had little to fear from being replaced anyway (indeed, the only alternative to firing is exchanging, which perhaps is part of the reason Soviet labor was more mobile than Western labor, trapped as the latter was by the fear of destitution). But the state's end was, like that of the US, productivity, and worker happiness wasn't as productive as work itself, so enter the labor camps. Add the US's own prison-industrial complex to its aforementioned labor reserve army and you'll find something similar.

Paleocon said:

I didn't decide that. Property rights originated ages ago.

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So did religion. The decision is whether to believe.

Economists have been punching holes in Georgism for a long time now.

Paschendale said:

That's all fine and well as a theory, too. Shared ownership and collective progress was how most human civilizations operated for most of human history. That's how humanity survived long enough to invent greed.

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Really? So the biggest strongest guy around didn't rule over everyone else? :lol:

The Minimalist said:

So did religion. The decision is whether to believe.

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It's not a matter of belief, it's a matter of protecting the ancient rights of landowners against those who would usurp their rights.

For the record I oppose both the (praise be to God) failed Communist revolution and the unfortunately successful bourgeoisie revolution.

Paleocon said:

It's not a matter of belief, it's a matter of protecting the ancient rights of landowners against those who would usurp their rights.

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Enclosure and Indian Removal aren't generally classified as ancient, but it is anyway your decision to believe in the resulting rights.

The Minimalist said:

Enclosure and Indian Removal aren't generally classified as ancient, but it is anyway your decision to believe in the resulting rights.

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Property rights did not begin with Indian removal.

Henrin said:

Really? So the biggest strongest guy around didn't rule over everyone else? :lol:

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Most of the time, no. Not until the agricultural revolution which, while generally a good thing, got us into this whole owning land thing. The result of which was the invention of slavery, class, and the oppression of one's neighbors. And even then, never in history has there really ever been one person in charge of a large group. There was a ruling faction. There's nothing natural or default about ownership or class or oppression. We invented all of it. Cooperation was our natural state for two hundred thousand years. That's a real tradition we could learn from, not the ten thousand year anomaly of cruelty.

Paschendale said:

Most of the time, no. Not until the agricultural revolution which, while generally a good thing, got us into this whole owning land thing. The result of which was the invention of slavery, class, and the oppression of one's neighbors. And even then, never in history has there really ever been one person in charge of a large group. There was a ruling faction. There's nothing natural or default about ownership or class or oppression. We invented all of it. Cooperation was our natural state for two hundred thousand years. That's a real tradition we could learn from, not the ten thousand year anomaly of cruelty.

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Do you have any evidence for this era of utopia?

Paschendale said:

Most of the time, no. Not until the agricultural revolution which, while generally a good thing, got us into this whole owning land thing. The result of which was the invention of slavery, class, and the oppression of one's neighbors. And even then, never in history has there really ever been one person in charge of a large group. There was a ruling faction. There's nothing natural or default about ownership or class or oppression. We invented all of it. Cooperation was our natural state for two hundred thousand years. That's a real tradition we could learn from, not the ten thousand year anomaly of cruelty.

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Really? So at point in this would you put the American Indians?

Paleocon said:

Property rights did not begin with Indian removal.

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I assumed by your name you're American, so I was referring to American property rights. But you'll be hard-pressed to find a land entitlement on Earth not born of conquest, and as your stall tactics indicate you couldn't pass the is-ought gap between the entitlement and whatever act you believe warranted it anyway.

Paleocon said:

Do you have any evidence for this era of utopia?

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Big man (anthropology) - Wikipedia, the free encyclopedia

Henrin said:

Really? So at point in this would you put the American Indians?

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Indians were at various stages of development. They ranged from meritocratic leadership like Big Man or Chief all the way up to European-style hereditary power.

The Minimalist said:

I assumed by your name you're American, so I was referring to American property rights. But you'll be hard-pressed to find a land entitlement on Earth not born of conquest, and as your stall tactics indicate you couldn't pass the is-ought gap between the entitlement and whatever act you believe warranted it anyway.



Big man (anthropology) - Wikipedia, the free encyclopedia



Indians were at various stages of development. They ranged from meritocratic leadership like Big Man or Chief all the way up to European-style hereditary power.

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What is-ought gap? I don't accept the idea that morality is divorced from reality, as that is ridiculous.

Wikipedia is not a valid source.