Occupy earth? Sounds like a good idea.

November 3, 2011 § Leave a comment

NOW IF ONLY the choice places on the Earth were open to occupation. Perhaps then, millions would not have to crowd into slums?

Perhaps if more valuable locations on Earth were available, rather than neglected or hoarded for for the fun and profit of the 1% and a fortunate few friends, then living/working/playing space would be more plentiful and rents much cheaper.

If rents for businesses — from manufacturing to distribution to retail — were cheaper, then wouldn’t self-employment be a lot easier? And wouldn’t small businesses, who are the real job creators, be able to hire more people at higher wages?

If housing rents were cheaper, wouldn’t that give people yet more disposable income and a higher living standard?

If access to the soil and raw materials from which everything is made (including our meals) were more widely distributed, wouldn’t opportunity further expand?

Is there a relatively simple mechanism by which we could open up more of the space and natural gifts of the earth for useful occupation on behalf of the 99% — rather than for hoarders, speculators, and “homeowners” who’ve been sold the illusion that a mortgaged home is a rock-solid “investment”?

Would making it cheaper to occupy the earth also remove a large source of the privilege flowing to (and our economy’s dependence on) the “lendlords” of Wall Street, who deal largely in mortgages and mortgage-backed securities — deals that monetize, “securitize” and trade in pieces of earth, and inflate its value through causing artificial scarcity?Such a mechanism is available. See the below excerpt from The Menace of Privilege, a prescient book written in 1905 by Henry George, Jr.

——————

From The Menace of Privilege, Chap. 24

WE have now seen at some length the nature of privilege in the United States, and its varied and deadly fruits — that the wonderfully great volume of wealth being produced in this country is being most unequally distributed;

that this is due to the exercise of powers of appropriation possessed by some individuals, and conferred upon them by special or general grants of government or by government passively sanctioned;

that these powers are privileges, and are, in effect, what the word “privileges” in its original sense meant, private laws — laws for the advantage of particular persons;

that in consequence of these privileges, veritable princes of riches are being raised on the one side, while the masses are being held down to an intensifying struggle for a living on the other;

that this is producing two distinct classes — the one imbued with feelings of superiority and arrogance, the other of envy and hatred;

that as a further consequence, public and private morals are suffering, the superabundantly rich falling into monstrous business practices, private infidelities, divorce habits and irresponsibility for child-bearing, while the multitude of workers are being reduced to conditions breeding want, sin and crime, from which must come general physical, mental and moral deterioration.

Proceeding, we have seen how, rising out of this state of things, the country is being divided into two great militant camps that of the owners of privileges and that of the resisting working masses;

that the latter, organizing trade unions for defense, and then realizing the power coming to cornbination, have in specific cases passed from the defensive to the offensive with circumstances of tyranny and insolence;

that to destroy trade unions, Privilege is abusing court orders and the military functions of Government;

that in order to control Government, Privilege is corrupting politics;

that in order to influence public opinion, it is reaching out for press, university and pulpit;

that in order to extend its conquests and divert the popular mind with dreams of glory, it is directing foreign aggression.

All these results we have seen to follow a continuing unequal distribution of wealth, and this unequal distribution of wealth to be a fruit of the grants and passive sanctions of Government, called privileges.

Therefore in looking for a remedy or for remedies for this mass of great evils besetting the Republic, we must address ourselves to their causes — to privileges. What is the cure for privileges?

Types of Privilege

As was stated earlier, the privileges that concern us particularly are divisible into four grand classes or categories: –

Private ownership of natural opportunities;

Tariff and other taxation on production and on its fruits;

Special Government grants; and

Grants under general laws and immunities in the courts.

I. Private Ownership of Natural Opportunities

This is the underlying ill of the Republic. Other forms of privilege at this time attract more attention, but none compare with it in baleful effect upon the nation. For, reduced to simple terms, it means that the land of the United States does not belong to all the people of the United States, but only to some. That some, owing to the law of concentration, is diminishing in number, while the general population at the same time is increasing. The mass have to pay the comparatively few for the right to live on the soil of the United States, so that the aggregate of that payment is augmenting with multiplying population.

This state of things is not indispensable to high civilization. It is part of our civilization because we adopted it from other peoples. …

[T]his form of privilege was instituted among us not by a distinct and formal act, like the adoption of a constitution or the passage of a law. It came by absorption, with our language and other institutions from Europe. At first it did not appear in the light of a privilege, because few or none were deprived of opportunity of getting and owning land. But as the supply of free land gave out, and thousands and millions could not obtain any, and as the number of landowners is, not only relatively to the population but actually, lessening, the exclusive nature of the institution of private property in land appeared here. It concentrates land in few hands, precisely as if the land had originally been granted by special private acts, that is, by special acts of Government distributing all the land as particular gifts to individuals.

But because a bad institution exists, it does not follow that it should continue to exist. …

This ground or economic rent is in the aggregate prodigious in amount, and all but a small portion of it is going into private pockets.

But this conceded, what is to be done in remedy? How is the principle of equal rights to be reconciled with individual use of the land? …

Leave the land in its present hands, but tax its entire annual value into the public treasury.

Consider the volume of revenue from this one source in this country if all land having value, exclusive and regardless of improvements — all urban and suburban land, all agricultural land, all forest land, all land bearing minerals or oil or gas in its bosom, all grazing land, all land that would sell for anything on the open market — should turn that value over to the public tax gatherer!

It is conservative to say that the revenue for municipal, State and Federal purposes would far exceed the present needs of Government economically administered. *

(A simple method of dividing the revenue raised by this single tax would be to have the municipality use part of the existing taxation machinery, collect the tax, and pay over to the state and Federal authorities the quotas apportioned for each. The income tax, several times levied by the Federal Government, was left to the States respectively to collect and turn over to the Federal Treasury, the amount from each State being apportioned, and the Federal Government making a liberal discount for the labor and expense saved it by the States.)

It would therefore make unnecessary the multitude of compounding taxes now heavily burdening and galling production. The whole weight of Government — Federal, State and municipal — would thus rest, through this single tax, upon the rent of land: of land alone, regardless of improvements. …

A point to be accentuated is that this very tax now exists in rudimentary form in our present complicated fiscal system. A tax on land values is one of the multitude of taxes we now levy. But its size or rate is inconsiderable. What is proposed is to abolish the whole mass of taxes save this one small tax falling on land values, and to increase its amount or rate until it absorbs the entire potential or economic rent.

The landowner could not shift this tax, for, as John Stuart Mill has said: “A tax on rent falls wholly on the landlord. There is no means by which he can shift the burden upon any one else.” (“Principles of Political Economy,” Book V, chap. III, Sec. 2.) A cloud of authorities and common reason support this statement.

But why discriminate; why make land values the sole resting-place of taxes? Because, for one reason, land values are not produced by landowners, but by the public; by social growth and social improvement. John Stuart Mill most wisely says, “It is not the fortunes which are earned, but those which are unearned, that it is for the public good to place under limitation.” (Book V, Chap. II, Sec. 3.)

What he means by that may be judged from a further statement: “When the ‘sacredness of property’ is talked of, it should always be remembered that any such sacredness does not belong in the same degree to landed property. No man made the land. It is the original inheritance of the whole species. Its appropriation is wholly a question of general expediency. When private property in land is not expedient, it is unjust.” …

In a word, this single tax conforms more nearly than any other kind of tax does to what Adam Smith calls the “four maxims” of taxation, which maxims or conditions my father has compactly set down as follows: —

That it bear as lightly as possible upon production …

That it be easily and cheaply collected, and fall as directly as may be upon the ultimate payers so as to take from the people as little as possible in addition to what it yields the Government.

That it be certain – so as to give the least opportunity for tyranny or corruption on the part of officials, and the least temptation to law-breaking and evasion on the part of the taxpayers.

That it bear equally – so as to give no citizen an advantage, as compared with others. …

That this single, land value tax would most nearly meet these requirements is important, indeed. …

‘A great and permanent stimulation’

There is truth in the common saying that “most of the trusts have their roots in the soil.” Tax that soil, and you get them from the roots up. Apply such a tax to the Steel Trust, to the Oil Trust, to the Lumber Trust, to the Salt Trust, to the Borax Trust, to the hundred and one great industrial combinations, and they will go to pieces in the same fashion as the Coal Trust would. [Other] privileges, which later will be considered, enter into some of these trusts; but the monopolies of the storehouses of nature, of natural opportunities, are privileges without which such trusts could not exist.

Possessing them untaxed or practically untaxed, the trusts can laugh at all steps to “regulate” and “moralize” them. They are like men having legal possession of an oasis in a desert. Caravans that come that way must pay the owners’ price for water and resting accommodation, or proceed on their way without stopping. …

The public appropriation, through taxation, of the full economic rent would have a similar effect upon every trust or combination based upon a monopoly of natural opportunities, and most of them are so based. It would not lop off a little of the foliage here or there, which is the best that “regulation” of the trusts could do; it would strike at the roots.

And the tax that would go so vitally home to the trusts — to the monopolizers of the vast unused mineral, agricultural, timber and grazing resources of the country –would fall with a killing hand upon land speculation in and about every city and town and village in the United States. It is probable that not a third of the available area of the city of Greater New York is in use; and this is more or less the condition in all our communities.

The rise in value of urban land is so active that there is a general desire to obtain some of it so as to participate in this increase. This causes a great many people to regard land, not for its present use, but for its future value — the increased price that growing needs of population will cause to be paid for it. … [Therefore] every community must pay rent on the land it uses based upon what that land will be worth some time in the future. It makes an artificial scarcity of the land, insomuch as it puts a speculative or artificial value on it.And every betterment that occurs in the community, making it a more desirable locality for men to be in, adds to the value of land, as any who will may see when a street is paved, a new transportation line put through, or a public park opened. The speculator does nothing but wait. He waits for population to increase the demand for his land.

Now the mere talk of taxing land values checks speculation, and a tax based upon the selling value of urban land — a tax that would take the whole rental value, as based upon that selling price — would cause such speculation to turn into thin air and vanish.

For where would be the fruit of speculation if taxation absorbed the whole value, whether that value advanced or receded? The future would hold out no hope to speculation … The price of land would shrink to [its] value in use; that is to say, urban land would be cheaper, much cheaper, than it is now.

Obviously this would be a great benefit to all the users of land, and everybody in the city, town or village uses it, some more, some less. To cheapen land would benefit the storekeeper, the factory and mill owner, the banker, the professional man, the clerk, the mechanic, the seamstress – all the inhabitants of the community except the land speculator *, who would lose; yet he, too, would be a gainer to the extent that he would live in a community so much more prosperous.

In other words, taxing economic rent into the public treasury would destroy monopoly of natural opportunities in the urban centers just as it would destroy land monopoly elsewhere. The land that Nature offers for building sites would be thrown open for such use, instead of being fenced in and marked, “Reserved for future use.” Labor and capital would have to pay less for the use of this land, and every channel of production in these centers would receive a great and permanent stimulation.

* Since the size of government has ballooned so wildly out of proportion since those words were written, many contemporary Georgists or geolibertarians propose to fund only essential government functions from the rent, using the surplus as 1) an exemption for owner-occupied homes, up to a certain amount; 2) an equal “refund” or dividend paid to every citizen, or both.

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