Georgism, also called in modern times Geoism,[2][3] and known historically as the single tax movement, is an economic ideology holding that, although people should own the value they produce themselves, the economic rent derived from land—including from all natural resources, the commons, and urban locations—should belong equally to all members of society.[4][5][6] Developed from the writings of American economist and social reformer Henry George, the Georgist paradigm seeks solutions to social and ecological problems, based on principles of land rights and public finance which attempt to integrate economic efficiency with social justice.[7][8]
Georgism is concerned with the distribution of economic rent caused by land ownership, natural monopolies, pollution rights, and control of the commons, including title of ownership for natural resources and other contrived privileges (e.g., intellectual property). Any natural resource which is inherently limited in supply can generate economic rent, but the classical and most significant example of land monopoly involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair and equitable. The main Georgist policy recommendation is a tax assessed on land value, arguing that revenues from a land value tax (LVT) can be used to reduce or eliminate existing taxes (such as on income, trade, or purchases) that are unfair and inefficient. Some Georgists also advocate for the return of surplus public revenue to the people by means of a basic income or citizen's dividend.
Georgist ideas were popular and influential during the late 19th and early 20th century.[17] Political parties, institutions and communities were founded based on Georgist principles during that time. Early devotees of Henry George's economic philosophy were often termed Single Taxers for their political goal of raising public revenue mainly or only from a land value tax, although Georgists endorsed multiple forms of rent capture (e.g. seigniorage) as legitimate.[18] The term Georgism was invented later, and some prefer the term geoism as more generic.[19][20]
A supply and demand diagram showing the effects of land value taxation in which burden of the tax is entirely on the landowner when the tax is implemented. The rental price of land does not change and there is no deadweight loss.
Henry George is best known for popularizing the argument that government should be funded by a tax on land rent rather than taxes on labor. George believed that although scientific experiments could not be performed in political economy, theories could be tested by comparing different societies with different conditions and by thought experiments about the effects of various factors.[21] Applying this method, he concluded that many of the problems that beset society, such as poverty, inequality, and economic booms and busts, could be attributed to the private ownership of the necessary resource, land rent. In his most celebrated book, Progress and Poverty, George argues that the appropriation of land rent for private use contributes to persistent poverty in spite of technological progress, and causes economies to exhibit a tendency toward boom and bust cycles. According to George, people justly own what they create, but natural opportunities and land belong equally to all.[5]
The tax upon land values is, therefore, the most just and equal of all taxes. It falls only upon those who receive from society a peculiar and valuable benefit, and upon them in proportion to the benefit they receive. It is the taking by the community, for the use of the community, of that value which is the creation of the community. It is the application of the common property to common uses. When all rent is taken by taxation for the needs of the community, then will the equality ordained by Nature be attained. No citizen will have an advantage over any other citizen save as is given by his industry, skill, and intelligence; and each will obtain what he fairly earns. Then, but not till then, will labor get its full reward, and capital its natural return.
—Henry George, Progress and Poverty, Book VIII, Chapter 3
George believed there was an important distinction between common and collective property.[22] Although equal rights to land might be achieved by nationalizing land and then leasing it to private users, George preferred taxing unimproved land value and leaving the control of land mostly in private hands. George's reasoning for leaving land in private control and slowly shifting to land value tax was that it would not penalize existing owners who had improved land and would also be less disruptive and controversial in a country where land titles have already been granted.
Georgists have observed that privately created wealth is socialized via the tax system (e.g., through income and sales tax), while socially created wealth in land values are privatized in the price of land titles and bank mortgages. The opposite would be the case if land rents replaced taxes on labor as the main source of public revenue; socially created wealth would become available for use by the community, while the fruits of labor would remain private.[23] According to Georgists, a land value tax can be considered a user fee instead of a tax, since it is related to the market value of socially created locational advantage, the privilege to exclude others from locations. Assets consisting of commodified privilege can be considered as wealth since they have exchange value, similar to taxi medallions.[24][failed verification] A land value tax, charging fees for exclusive use of land, as a means of raising public revenue is also a progressive tax tending to reduce economic inequality,[14][15] since it applies entirely to ownership of valuable land, which is correlated with income,[25] and there is generally no means by which landlords can shift the tax burden onto tenants or laborers. Landlords are unable to pass the tax on to tenants because the supply and demand of rented land is unchanged. Because the supply of land is perfectly inelastic, land rents depend on what tenants are prepared to pay, rather than on the expenses of landlords, and so the tax cannot be passed on to tenants.[26]
Standard economic theory suggests that a land value tax would be extremely efficient—unlike other taxes, it does not reduce economic productivity.[16]Milton Friedman described Henry George's tax on unimproved value of land as the "least bad tax", since unlike other taxes, it would not impose an excess burden on economic activity (leading to zero or even negative "deadweight loss"); hence, a replacement of other more "distortionary" taxes with a land value tax would improve economic welfare.[27] As land value tax can improve the use of land and redirect investment toward productive, non-rent-seeking activities, it could even have a negative dead-weight loss that boosts productivity.[28] Because land value tax would apply to foreign land speculators, the Australian Treasury estimated that land value tax was unique in having a negative marginal excess burden, meaning that it would increase long-run living standards.[29]
Ground-rents are a still more proper subject of taxation than the rent of houses. A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground-rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground-rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground-rent. Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents and the ordinary rent of land are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them. ... Nothing can be more reasonable than that a fund which owes its existence to the good government of the state should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government.
—Adam Smith, The Wealth of Nations, Book V, Chapter 2
Benjamin Franklin and Winston Churchill made similar distributional and efficiency arguments for taxing land rents. They noted that the costs of taxes and the benefits of public spending always eventually apply to and enrich the owners of land. Therefore, they believed it would be best to defray public costs and recapture value of public spending by applying public charges directly to owners of land titles, rather than harming public welfare with taxes assessed against beneficial activities such as trade and labor.[30][31]
Henry George wrote that his plan for a high land value tax would cause people "to contribute to the public, not in proportion to what they produce ... but in proportion to the value of natural [common] opportunities that they hold [monopolize]". He went on to explain that "by taking for public use that value which attaches to land by reason of the growth and improvement of the community", it would, "make the holding of land unprofitable to the mere owner, and profitable only to the user".
A high land value tax would discourage speculators from holding valuable natural opportunities (like urban real estate) unused or only partially used. Henry George claimed this would have many benefits, including the reduction or elimination of tax burdens from poorer neighborhoods and agricultural districts; the elimination of a multiplicity of taxes and expensive obsolete government institutions; the elimination of corruption, fraud, and evasion with respect to the collection of taxes; the enablement of true free trade; the destruction of monopolies; the elevation of wages to the full value of labor; the transformation of labor-saving inventions into blessings for all; and the equitable distribution of comfort, leisure, and other advantages that are made possible by an advancing civilization.[32] In this way, the vulnerability that market economies have to credit bubbles and property manias would be reduced.[16]
Sources of economic rent and related policy interventions
Income flow resulting from payments for restricted access to natural opportunities or for contrived privileges over geographic regions is termed economic rent. Georgists argue that economic rent of land, legal privileges, and natural monopolies should accrue to the community, rather than private owners. In economics, "land" is everything that exists in nature independent of human activity. George explicitly included climate, soil, waterways, mineral deposits, laws/forces of nature, public ways, forests, oceans, air, and solar energy in the category of land.[33][34] While the philosophy of Georgism does not say anything definitive about specific policy interventions needed to address problems posed by various sources of economic rent, the common goal among modern Georgists is to capture and share (or reduce) rent from all sources of natural monopoly and legal privilege.[35][36]
Henry George shared the goal of modern Georgists to socialize or dismantle rent from all forms of land monopoly and legal privilege. However, George emphasized mainly his preferred policy known as land value tax, which targeted a particular form of unearned income known as ground rent. George emphasized ground-rent because basic locations were more valuable than other monopolies and everybody needed locations to survive, which he contrasted with the less significant streetcar and telegraph monopolies, which George also criticized. George likened the problem to a laborer traveling home who is waylaid by a series of highway robbers along the way, each who demand a small portion of the traveler's wages, and finally at the very end of the road waits a robber who demands all that the traveler has left. George reasoned that it made little difference to challenge the series of small robbers when the final robber remained to demand all that the common laborer had left.[37] George predicted that over time technological advancements would increase the frequency and importance of lesser monopolies, yet he expected that ground rent would remain dominant.[38] George even predicted that ground-rents would rise faster than wages and income to capital, a prediction that modern analysis has shown to be plausible, since the supply of land is fixed.[39]
Spatial rent is still the primary emphasis of Georgists because of its large value and the known dis-economies of misused land. However, there are other sources of rent that are theoretically analogous to ground-rent and are debated topics of Georgists. The following are some sources of economic rent.[40][41][42]
Extractable resources (minerals and hydrocarbons)[43][44]
Severables (forests and stocks of fish)[36][45][46]
Extraterrestrial domains (geosynchronous orbits and airway corridor use)[41][42]
Legal privileges that apply to specific location (taxi medallions, billboard and development permits, or the monopoly of electromagnetic frequencies)[41][42]
Privileges that are less location dependent but that still exclude others from natural opportunities (patents)[51][52]
Where free competition is impossible, such as telegraphs, water, gas, and transportation, George wrote, "[S]uch business becomes a proper social function, which should be controlled and managed by and for the whole people concerned." Georgists were divided by this question of natural monopolies and often favored public ownership only of the rents from common rights-of-way, rather than public ownership of utility companies themselves.[32]
Georgism and environmental economics
The early conservationism of the Progressive Era was inspired partly by Henry George, and his influence extended for decades afterward.[53] Some ecological economists still support the Georgist policy of land value tax as a means of freeing or rewilding unused land and conserving nature by reducing urban sprawl.[54][55][56]
Pollution degrades the value of what Georgists consider to be commons. Because pollution is a negative contribution, a taking from the commons or a cost imposed on others, its value is economic rent, even when the polluter is not receiving an explicit income. Therefore, to the extent that society determines pollution to be harmful, most Georgists propose to limit pollution with taxation or quotas that capture the resulting rents for public use, restoration, or a citizen's dividend.[35][57][58]
Georgism is related to the school of ecological economics, since both propose market-based restrictions for pollution.[54][59] The schools are compatible in that they advocate using similar tools as part of a conservation strategy, but they emphasize different aspects. Conservation is the central issue of ecology, whereas economic rent is the central issue of geoism. Ecological economists might price pollution fines more conservatively to prevent inherently unquantifiable damage to the environment, whereas Georgists might emphasize mediation between conflicting interests and human rights.[36][60]Geolibertarianism, a market-oriented branch of Geoism, tends to take a direct stance against what it perceives as burdensome regulation and would like to see auctioned pollution quotas or taxes replace most command and control regulation.[61]
Since ecologists are primarily concerned with conservation, they tend to emphasize less the issue of equitably distributing scarcity/pollution rents, whereas Georgists insist that unearned income not accrue to those who hold title to natural assets and pollution privilege. To the extent that geoists recognize the effect of pollution or share conservationist values, they will agree with ecological economists about the need to limit pollution, but geoists will also insist that pollution rents generated from those conservation efforts do not accrue to polluters and are instead used for public purposes or to compensate those who suffer the negative effects of pollution. Ecological economists advocate similar pollution restrictions but, emphasizing conservation first, might be willing to grant private polluters the privilege to capture pollution rents. To the extent that ecological economists share the geoist view of social justice, they would advocate auctioning pollution quotas instead of giving them away for free.[54] This distinction can be seen in the difference between basic cap and trade and the geoist variation, cap and share, a proposal to auction temporary pollution permits, with rents going to the public, instead of giving pollution privilege away for free to existing polluters or selling perpetual permits.[62][63]
Revenue uses
The revenue can allow the reduction or elimination of taxes, greater public investment/spending, or the direct distribution of funds to citizens as a pension or basic income/citizen's dividend.[36][64][65]
In practice, the elimination of all other taxes implies a high land value tax, greater than any currently existing land tax. Introducing or increasing a land value tax would cause the purchase price of land to decrease. George did not believe landowners should be compensated and described the issue as being analogous to compensation for former slave owners. Other geoists disagree on the question of compensation; some advocate complete compensation while others endorse only enough compensation required to achieve Georgist reforms. Some geoists advocate compensation only for a net loss due to a shift of taxation to land value; most taxpayers would gain from the replacement of other taxes with a tax on land value. Historically, those who advocated for taxes on rent tax only great enough to replace other taxes were known as endorsers of single tax limited.
Synonyms and variants
Georgist single tax poster published in The Public, a Chicago newspaper (c.1910–1914)
Most early advocacy groups described themselves as single taxers and George reluctantly accepted the single tax as an accurate name for his main political goal—the repeal of all unjust or inefficient taxes, to be replaced with a land value tax (LVT).
Some modern proponents are dissatisfied with the name Georgist. While Henry George was well known throughout his life, he has been largely forgotten by the public and the idea of a single tax of land predates him. Some now prefer the term geoism,[20][66] with geo (from Greek γῆgē "earth, land") being the first compound of the name George < (Gr.) Geōrgios < geōrgos "farmer" or geōrgia "agriculture, farming" < gē + ergon "work"[67][68] deliberately ambiguous. The terms Earth Sharing,[69]geonomics[70] and geolibertarianism[71] are also used by some Georgists. These terms represent a difference of emphasis and sometimes real differences about how land rent should be spent (citizen's dividend or just replacing other taxes), but they all agree that land rent should be recovered from its private recipients.
Compulsory fines and fees related to land rents are the most common Georgist policies, but some geoists prefer voluntary value capture systems that rely on methods such as non-compulsory or self-assessed location value fees, community land trusts[72] and purchasing land value covenants.[73][74][75][76][77] Some geoists believe that partially compensating landowners is a politically expedient compromise necessary for achieving reform.[78][79] For similar reasons, others propose capturing only future land value increases, instead of all land rent.[80]
Some libertarians and minarchists take the position that limited social spending should be financed using Georgist concepts of rent value capture, but that not all land rent should be captured. Today, this relatively conservative adaptation is usually considered incompatible with true geolibertarianism, which requires that excess rents be gathered and then distributed back to residents. During Henry George's time, this restrained Georgist philosophy was known as "single tax limited", as opposed to "single tax unlimited." George disagreed with the limited interpretation, but he accepted its adherents (e.g., Thomas Shearman) as legitimate "single-taxers."[81]
Influence
Henry George, whose writings and advocacy form the basis for Georgism
In the United Kingdom, George's writings were praised by emerging socialist groups in 1890s such as the Independent Labour Party and the Fabian Society, which would each go on to help form the modern-day Labour Party.[82] The Liberal government included a land tax as part of several taxes in the 1909 People's Budget intended to redistribute wealth (including a progressively graded income tax and an increase of inheritance tax). This caused a political crisis that resulted indirectly in reform of the House of Lords. The budget was passed eventually—but without the land tax. In 1931, the minority Labour government passed a land value tax as part III of the 1931 Finance act. However, this was repealed in 1934 by the National Government before it could be implemented.
In Denmark, the Georgist Justice Party has previously been represented in Folketinget. It formed part of a centre-left government 1957–60 and was also represented in the European Parliament 1978–1979. The influence of Henry George has waned over time, but Georgist ideas still occasionally emerge in politics. For the United States 2004 presidential election, third-party presidential candidate Ralph Nader mentioned George in his policy statements.[83]
Economists still generally favor a land value tax.[84]Monetarist economist Milton Friedman publicly endorsed the Georgist land value tax as the "least bad tax".[13] Economist Joseph Stiglitz stated that: "Not only was Henry George correct that a tax on land is non-distortionary, but in an equilibrium society … tax on land raises just enough revenue to finance the (optimally chosen) level of government expenditure."[85] He dubbed this proposition the Henry George theorem.[86]
Several communities were initiated with Georgist principles during the height of the philosophy's popularity. Two such communities that still exist are Arden, Delaware, which was founded in 1900 by Frank Stephens and William Lightfoot Price, and Fairhope, Alabama, which was founded in 1894 under the auspices of the Fairhope Single Tax Corporation.[87] Some established communities in the United States also adopted Georgist tax policies. A Georgist in Houston, Texas, Joseph Jay "J.J." Pastoriza, promoted a Georgist club in that city established in 1890. Years later, in his capacity as a city alderman, he was selected to serve as Houston Tax Commissioner, and promulgated a "Houston Plan of Taxation" in 1912. Improvements to land and merchants' inventories were taxed at 25 percent of the appraised value, unimproved land was taxed at 70 percent of appraisal, and personal property was exempt. This Georgist tax continued until 1915, when two courts struck it down as violating the Texas Constitution in 1915. This quashed efforts in several other Texas cities which took steps towards implementing the Houston Plan in 1915: Beaumont, Corpus Christi, Galveston, San Antonio, and Waco.[88]
Henry George School of Social Science in New York City
Georgist ideas were also adopted to some degree in Australia, Hong Kong, Singapore, South Africa, South Korea, and Taiwan. In these countries, governments still levy some type of land value tax, albeit with exemptions.[90] Many municipal governments of the US depend on real property tax as their main source of revenue, although such taxes are not Georgist as they generally include the value of buildings and other improvements. One exception is the town of Altoona, Pennsylvania, which for a time in the 21st century only taxed land value, phasing in the tax in 2002, relying on it entirely for tax revenue from 2011, and ending it 2017; the Financial Times noted that "Altoona is using LVT in a city where neither land nor buildings have much value".[91][92]
Institutes and organizations
Various organizations still exist that continue to promote the ideas of Henry George. According to The American Journal of Economics and Sociology, the periodical Land&Liberty, established in 1894, is "the longest-lived Georgist project in history".[93] Founded during the Great Depression in 1932, the Henry George School of Social Science in New York offers courses, sponsors seminars, and publishes research in the Georgist paradigm.[94] Also in the US, the Lincoln Institute of Land Policy was established in 1974 based on the writings of Henry George. It "seeks to improve the dialogue about urban development, the built environment, and tax policy in the United States and abroad".[95]
The Henry George Foundation continues to promote the ideas of Henry George in the United Kingdom.[96]The IU is an international umbrella organisation that brings together organizations worldwide that seek land value tax reform.[97]
Reception
The economist Alfred Marshall believed that George's views in Progress and Poverty were dangerous, even predicting wars, terror, and economic destruction from the immediate implementation of its recommendations. Specifically, Marshall was upset about the idea of rapid change and the unfairness of not compensating existing landowners. In his lectures on Progress and Poverty, Marshall opposed George's position on compensation while fully endorsing his ultimate remedy. So far as land value tax moderately replaced other taxes and did not cause the price of land to fall, Marshall supported land value taxation on economic and moral grounds, suggesting that a three or four percent tax on land values would fit this condition. After implementing land taxes, governments would purchase future land values at discounted prices and take ownership after 100 years. Marshall asserted that this plan, which he strongly supported, would end the need for a tax collection department of government. For newly formed countries where land was not already private, Marshall advocated implementing George's economic proposal immediately.[98][99]
Karl Marx considered the single-tax platform as a regression from the transition to communism and referred to Georgism as "capitalism's last ditch".[100] Marx argued that, "The whole thing is ... simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one."[101] Marx also criticized the way land value tax theory emphasizes the value of land, arguing that George's "fundamental dogma is that everything would be all right if ground rent were paid to the state."[101] Georgist Fred Harrison responded to these objections in 2003.[102]
Richard T. Ely agreed with the economic arguments for Georgism but believed that correcting the problem the way Henry George wanted, without compensation, was unjust to existing landowners. In explaining his position, Ely wrote, "If we have all made a mistake, should one party to the transaction alone bear the cost of the common blunder?"[103]
John R. Commons supported Georgist economics but opposed what he perceived as an environmentally and politically reckless tendency for advocates to rely on a one-size-fits-all approach to tax reform, specifically, the "single tax" framing. Commons concluded The Distribution of Wealth, with an estimate that "perhaps 95% of the total values represented by these millionaire [sic] fortunes is due to those investments classed as land values and natural monopolies and to competitive industries aided by such monopolies", and that "tax reform should seek to remove all burdens from capital and labour and impose them on monopolies." However, he criticized Georgists for failing to see that Henry George's anti-monopoly ideas must be implemented with a variety of policy tools. Commons wrote, "Trees do not grow into the sky—they would perish in a high wind; and a single truth, like a single tax, ends in its own destruction." Commons uses the natural soil fertility and value of forests as an example of this destruction, arguing that a tax on the in-situ value of those depletable natural resources can result in overuse or over-extraction. Instead, Commons recommends an income tax-based approach to forests similar to a modern Georgist severance tax.[104][105]
Other contemporaries such as Austrian economist Frank Fetter and neoclassical economist John Bates Clark argued that it was impractical to maintain the traditional distinction between land and capital and used this as a basis to attack Georgism. Mark Blaug, a specialist in the history of economic thought, credits Fetter and Clark with influencing mainstream economists to abandon the idea "that land is a unique factor of production and hence that there is any special need for a special theory of ground rent" claiming that "this is in fact the basis of all the attacks on Henry George by contemporary economists and certainly the fundamental reason why professional economists increasingly ignored him".[106]
Robert Solow endorsed the theory of Georgism, while being wary of the perceived injustice of expropriation. Solow stated that taxing away expected land rents "would have no semblance of fairness"; however, Georgism would be good to introduce where location values were not already privatized or if the transition could be phased in slowly.[107]
George has also been accused of exaggerating the importance of his "all-devouring rent thesis" in claiming that it is the primary cause of poverty and injustice in society.[108] George argued that the rent of land increased faster than wages for labor because the supply of land is fixed. Modern economists, including Ottmar Edenhofer have demonstrated that George's assertion is plausible but was more likely to be true during George's time than now.[39]
An early criticism of Georgism was that it would generate too much public revenue and result in unwanted growth of government, but later critics argued that it would not generate enough income to cover government spending. Joseph Schumpeter concluded his analysis of Georgism by stating that, "It is not economically unsound, except that it involves an unwarranted optimism concerning the yield of such a tax." Economists who study land conclude that Schumpeter's criticism is unwarranted because the rental yield from land is likely much greater than what modern critics such as Paul Krugman suppose.[109] Krugman agrees that land value taxation is the best means of raising public revenue but asserts that increased spending has rendered land rent insufficient to fully fund government.[110] Georgists have responded by citing studies and analyses implying that land values of nations like the US, UK, and Australia are more than sufficient to fund all levels of government.[111][112][113][114][115][116][117]
Anarcho-capitalist political philosopher and economist Murray Rothbard criticized Georgism in Man, Economy, and State as being philosophically incongruent with subjective value theory, and further stating that land is irrelevant in the factors of production, trade, and price systems,[118] but this critique is seen by some, including other opponents of Georgism, as relying on false assumptions and flawed reasoning.[119]
Austrian economist Friedrich Hayek credited early enthusiasm for Henry George with developing his interest in economics. Later, Hayek said that the theory of Georgism would be very strong if assessment challenges did not result in unfair outcomes, but he believed that they would.[120]
William Spencer Vickrey was a Canadian-American professor of economics and Nobel Laureate. Vickrey was awarded the 1996 Nobel Memorial Prize in Economic Sciences with James Mirrlees for their research into the economic theory of incentives under asymmetric information, becoming the only Nobel laureate born in British Columbia.
A land value tax (LVT) is a levy on the value of land without regard to buildings, personal property and other improvements upon it. It is also known as a location value tax, a point valuation tax, a site valuation tax, split rate tax, or a site-value rating.
Henry George was an American political economist and journalist. His writing was immensely popular in 19th-century America and sparked several reform movements of the Progressive Era. He inspired the economic philosophy known as Georgism, the belief that people should own the value they produce themselves, but that the economic value of land should belong equally to all members of society. George famously argued that a single tax on land values would create a more productive and just society.
Citizen's dividend is a proposed policy based upon the Georgist principle that the natural world is the common property of all people. It is proposed that all citizens receive regular payments (dividends) from revenue raised by leasing or taxing the monopoly of valuable land and other natural resources.
In neoclassical economics, economic rent is any payment to the owner of a factor of production in excess of the cost needed to bring that factor into production. In classical economics, economic rent is any payment made or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities. In the moral economy of neoclassical economics, economic rent includes income gained by labor or state beneficiaries of other "contrived" exclusivity, such as labor guilds and unofficial corruption.
Classical economics, classical political economy, or Smithian economics is a school of thought in political economy that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. Its main thinkers are held to be Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. These economists produced a theory of market economies as largely self-regulating systems, governed by natural laws of production and exchange.
Geolibertarianism is a political and economic ideology that integrates libertarianism with Georgism. It favors a taxation system based on income derived from land and natural resources instead of on labor, coupled with a minimalist model of government, as in libertarianism.
Harold Hotelling was an American mathematical statistician and an influential economic theorist, known for Hotelling's law, Hotelling's lemma, and Hotelling's rule in economics, as well as Hotelling's T-squared distribution in statistics. He also developed and named the principal component analysis method widely used in finance, statistics and computer science.
John Rogers Commons was an American institutional economist, Georgist, progressive and labor historian at the University of Wisconsin–Madison.
Merrill Mason Gaffney was an American economist and a major critic of Neoclassical economics from a Georgist point of view. Gaffney first read Henry George's masterwork Progress and Poverty as a high school junior. This interest led him to Harvard University in 1941 but, unimpressed with their approach to economics he left in 1942 to join the war effort. After serving in the southwest Pacific during World War II he earned his B.A. in 1948 from Reed College in Portland, Oregon. In 1956 he gained a Ph.D. in economics at the University of California, Berkeley. There he addressed his teachers' skepticism about Georgism with a dissertation titled "Land Speculation as an Obstacle to Ideal Allocation of Land." Gaffney was Professor of Economics at the University of California, Riverside from 1976 onwards. He died in July 2020 at the age of 96.
The Landlord's Game is a board game patented in 1904 by Elizabeth Magie as U.S. Patent 748,626. It is a realty and taxation game intended to educate users about Georgism. It is the inspiration for the 1935 board game Monopoly.
Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy is an 1879 book by social theorist and economist Henry George. It is a treatise on the questions of why poverty accompanies economic and technological progress and why economies exhibit a tendency toward cyclical boom and bust. George uses history and deductive logic to argue for a radical solution focusing on the capture of economic rent from natural resource and land titles.
The Henry George theorem states that under certain conditions, aggregate spending by government on public goods will increase aggregate rent based on land value more than that amount, with the benefit of the last marginal investment equaling its cost. The theory is named for 19th century U.S. political economist and activist Henry George.
Fred Harrison is a British author, economist, economic commentator, and corporate policy advisor, notable for his stances on land reform and belief that an overreliance on land, property, and mortgages weakens economic structures and makes companies vulnerable to economic collapse. Dirk Bezemer, a Professor of Economics at the University of Groningen in the Netherlands, noted that Harrison was one of the earliest to have predicted the 2008 global financial crisis. In 2005 Harrison commented: "The next property market tipping point is due at end of 2007 or early 2008 ... The only way prices can be brought back to affordable levels is a slump or recession.”
The IU, in full the International Union for Land Value Taxation, is an international umbrella organisation for land value tax reformers. It has members in countries around the world - activists, politicians, professionals and academics, and is affiliated with national and local organisations. The IU enjoys Special Consultative Status at the United Nations.
Land value taxation has a long history in the United States dating back from Physiocrat influence on Thomas Jefferson and Benjamin Franklin. It is most famously associated with Henry George and his book Progress and Poverty (1879), which argued that because the supply of land is fixed and its location value is created by communities and public works, the economic rent of land is the most logical source of public revenue. and which had considerable impact on turn-of-the-century reform movements in America and elsewhere. Every single state in the United States has some form of property tax on real estate and hence, in part, a tax on land value. However, Pennsylvania in particular has seen local attempts to rely more heavily on the taxation of land value.
Prosper Australia is a non-profit association incorporated in the State of Victoria, Australia dedicated to reforming taxes onto land as articulated by Adam Smith, the Physiocrats, John Stuart Mill, and most notably by Henry George in Progress and Poverty.
Harry Gunnison Brown was a Georgist economist teaching at Yale in the early 20th century. Paul Samuelson named Brown in a list of "American saints in economics" that included only 6 other economists born after 1860.
The Robert Schalkenbach Foundation is a private operating foundation dedicated to the social and economic philosophy of Henry George.
On November 7, 1990, an open letter to then President of the Soviet Union Mikhail Gorbachev was published and signed by a rank of thirty Western sources, most of whom were academics. The contents of the letter made the argument to the Soviet head of state that while moving the economy away from a centrally planned system towards a free market mixed economy was a step forward, they warned the leader against following through with the West had done following the end of feudalism; privatising the land itself, instead opting towards a Georgist system of common ownership and the collection of public revenue through land-value taxation. Nobel prize-winners Franco Modigliani, James Tobin, Robert Solow and William Vickery were among the letter's signees.
1 2 Heavey, Jerome F. (July 2003). "Comments on Warren Samuels' "Why the Georgist movement has not succeeded"". American Journal of Economics and Sociology. 62 (3): 593–599. doi:10.1111/1536-7150.00230. JSTOR3487813. human beings have an inalienable right to the product of their own labor
1 2 Binswanger-Mkhize, Hans P; Bourguignon, Camille; Brink, Rogier van den (2009). Binswanger-Mkhize, Hans P.; Bourguignon, Camille; Van Den Brink, Rogier (eds.). Agricultural Land Redistribution: Toward Greater Consensus. World Bank. doi:10.1596/978-0-8213-7627-0. ISBN978-0-8213-7627-0. A land tax is considered a progressive tax in that wealthy landowners normally should be paying relatively more than poorer landowners and tenants. Conversely, a tax on buildings can be said to be regressive, falling heavily on tenants who generally are poorer than the landlords
↑ George, Henry. "Scotland and Scotsmen". Archived from the original on 10 August 2014. Retrieved 16 June 2014. Address delivered on 18 February 1884 at the City Hall, Glasgow
↑ Niman, Neil B. "Henry George and the Intellectual Foundations of the Open Source Movement"(PDF). Robert Schalkenbach Foundation. Archived from the original(PDF) on 20 June 2021. Retrieved 16 June 2014. A modern counterpart to the nineteenth century focus on land can be found in the twentieth century concern with the establishment of intellectual property rights that fence off a portion of the creative commons in order to construct temporary monopolies.
↑ Fox, Stephen R. The American Conservation Movement: John Muir and His Legacy. Madison, WI: U of Wisconsin, 1985.
1 2 3 Daly, Herman E., and Joshua C. Farley. Ecological Economics: Principles and Applications. Washington: Island, 2004.
↑ Barker, Charles A. "The Followers of Henry George". Henry George News. Archived from the original on 13 January 2015. Retrieved 13 January 2015. This is not to say that George was less than enthusiastic about Shearman's idea and the organized movement which presently occurred. He did speak for it, about as the common supposition takes for granted. He took the formula to Britain on his later, less important, visits, and introduced it in competition with other reforms. But there were limits to his enthusiasm. More than once he said that the name "single tax" lacked the dimensions of the underlying idea. And when inevitably the "single tax limited" came to open debate with the "single tax unlimited," the real issue was no less than whether or not Progress and Poverty's central proposition, that the land belongs to all the people and that economic rent should return to the community, the book's whole claim in the name of justice, would stand or fall.
↑ Stiglitz, Joseph (1977). "The theory of local public goods". In Feldstein, Martin; Inman, Robert (eds.). The Economics of Public Services. London: Macmillan Publishers. pp.274–333.
↑ Andelson, Robert V., ed. (2003). Critics of Henry George: An Appraisal of Their Strictures on Progress and Poverty. Vol.1. Wiley-Blackwell. ISBN978-1405118255.
↑ Cord, Steven (July–August 1991). "Land Rent is 20% of U.S. National Income for 1986". Incentive Taxation. pp.1–2.
↑ Miles, Mike (1990). "What Is the Value of all U.S. Real Estate?". Real Estate Review. 20 (2): 69–75.
↑ Tideman, Nicolaus; Plassman, Florenz (1988). "Taxed Out of Work and Wealth: The Costs of Taxing Labor and Capital". The Losses of Nations: Deadweight Politics versus Public Rent Dividends. London: Othila Press. pp.146–174.
↑ Andelson, Robert V. (January 2000). "On Separating the Landowner's Earned and Unearned Increment: A Georgist Rejoinder to F. A. Hayek". American Journal of Economics and Sociology. 59 (1): 109–117. doi:10.1111/1536-7150.00016. Hayek wrote, "It was a lay enthusiasm for Henry George which led me to economics."
↑ Brown, H. G. (1936). "A Defense of the Single Tax Principle". The Annals of the American Academy of Political and Social Science. 183 (1): 63–69. doi:10.1177/000271623618300109. S2CID144711642. The truth is that I recognize the fundamental justice and common sense of the single-tax idea. But that any other tax than a tax on land values is always and everywhere wrong, regardless of public needs or the nature of this other tax, I do not maintain.
↑ Harter, Lafayette G.; Commons, John R. (1962). His Assault on Laissez-faire. Corvallis: Oregon State University Press. pp.21, 32, 36, 38.
↑ Lindholm, Richard; Lynn, Jr., Arthur, eds. (1982). "Two Centuries of Economic Thought on Taxation of Land Rents". Land Value Taxation in Thought and Practice. Madison: University of Wisconsin Press. pp.151–196.
↑ Edenhofer, Ottmar (2013). Hypergeorgism: When is Rent Taxation as a Remedy for Insufficient Capital Accumulation Socially Optimal? (Report). SSRN2232659. Extending and modifying the tenet of georgism, we propose that this insight be called hypergeorgism." "From a historical perspective, our result may be closer to Henry George's original thinking than georgism or the neoclassical Henry George Theorems.
↑ Edenhofer, Ottmar (25 June 2013). "Financing Public Capital Through Land Rent Taxation: A Macroeconomic Henry George Theorem". CESifo Working Paper Series. SSRN2284745.
↑ Collected Works of Milton Friedman, Hoover Institution. "Is Tax Reform Possible? (February 06, 1978)". Hoover Institution. Retrieved 30 November 2019. Excerpt: Prof. Friedman:... In my opinion, and this may come as a shock to some of you, the least bad tax is the property tax on the unimproved value of land, the Henry George argument of many, many years ago. "
↑ Airlie Worrall, The New Crusade: the Origins, Activities and Influence of the Australian Single Tax Leagues, 1889–1895 (M.A. thesis, University of Melbourne, 1978).
↑ Turgeon, Lynn. Bastard Keynesianism: the evolution of economic thinking and policymaking since World War II. Westport, Conn: Praeger, 1997
↑ Gaffney, Mason, and Fred Harrison. The corruption of economics. London: Shepheard-Walwyn in association with Centre for Incentive Taxation, 2006
↑ Hotelling, Harold (1938). "The General Welfare in Relation to Problems of Taxation and of Railway and Utility Rates". Econometrica. 6 (3): 242–269. doi:10.2307/1907054. JSTOR1907054.
↑ Andelson, Robert V. (2000). Land-Value Taxation Around the World: Studies in Economic Reform and Social Justice Malden. MA: Blackwell Publishers Inc. p.359.
↑ Quotes from Nobel Prize Winners Herbert Simon stated in 1978: "Assuming that a tax increase is necessary, it is clearly preferable to impose the additional cost on land by increasing the land tax, rather than to increase the wage tax—the two alternatives open to the City (of Pittsburgh). It is the use and occupancy of property that creates the need for the municipal services that appear as the largest item in the budget—fire and police protection, waste removal, and public works. The average increase in tax bills of city residents will be about twice as great with wage tax increase than with a land tax increase."
↑ Stiglitz, Joseph (2 December 2010). "Working Paper No. 6: Principles and Guidelines for Deficit Reduction"(PDF). Next New Deal The Blog of the Roosevelt Institute. The Roosevelt Institute. p.5. Archived from the original(PDF) on 6 December 2010. Retrieved 22 February 2017. One of the general principles of taxation is that one should tax factors that are inelastic in supply, since there are no adverse supply side effects. Land does not disappear when it is taxed. Henry George, a great progressive of the late nineteenth century, argued, partly on this basis, for a land tax.
↑ Vickrey, William. "The Corporate Income Tax in the U.S. Tax System, 73 TAX NOTES 597, 603 (1996). Quote: "Removing almost all business taxes, including property taxes on improvements, excepting only taxes reflecting the marginal social cost of public services rendered to specific activities, and replacing them with taxes on site values, would substantially improve the economic efficiency of the jurisdiction."
↑ Boast, Richard (2008). Buying the land, selling the land: governments and Maori land in the North Island 1865–1921. Wellington, N.Z: Victoria University Press, Victoria University of Wellington. ISBN9780864735614.
↑ Daunton, M. J. State and market in Victorian Britain: war, welfare and capitalism. Woodbridge, UK Rochester, NY: Boydell Press, 2008. Quote: "In the election of 1890 he campaigned for radical land reform, arguing for a tax on the 'unearned increment', and advocated the programme of Henry George as a means of 'bursting up the great estates'."
↑ Stevens, Elizabeth Lesly. "A Tax Policy With San Francisco Roots". July 30, 2011 https://www.nytimes.com/2011/07/31/us/31bcstevens.html Quote: "But Mr. Brown was certainly in good company as a Georgist. Devotees over the years have included Leo Tolstoy, Winston Churchill, Sun Yat-Sen, and the inventor of the board game that would become Monopoly."
↑ Murdoch, Walter. Alfred Deakin: a sketch. Melbourne, Vic: Bookman, 1999. [1923]
↑ Bastian, Peter (2009). Andrew Fisher: An Underestimated Man. Sydney, N.S.W: UNSW Press. pp.28–30. ISBN978-1742230047.
↑ [George, Henry, Jr. The Life of Henry George. New York: Doubleday & McClure, 1900.]
↑ Hayes, Rutherford B. "Henry George". Archived from the original on 3 December 2013. Retrieved 26 November 2013.
↑ Post, Louis Freeland (April 12, 1912). "Sun Yat Sen's Economic Program for China". The Public. 15: 349. Retrieved 8 November 2016. land tax as the only means of supporting the government is an infinitely just, reasonable, and equitably distributed tax, and on it we will found our new system
↑ Altgeld, John (1899). Live Questions(PDF). Geo. S Bowen & Son. pp.776–781. Archived from the original(PDF) on 24 September 2014.
↑ Stevens, Elizabeth Lesly (July–August 2012). "The Power Broker". Washington Monthly. July/August 2012. Archived from the original on 12 December 2013. Retrieved 8 December 2013.
↑ Arnesen, Eric. Encyclopedia of U.S. Labor and Working-class History. New York: Routledge, 2007
↑ Johnston, Robert D. The Radical Middle Class: Populist Democracy and the Question of Capitalism in Progressive Era Portland, Oregon. Princeton, N.J: Princeton University Press, 2003
↑ Howe, Frederic C. The Confessions of a Reformer. Kent, OH: Kent State UP, 1988.
↑ Arcas Cubero, Fernando: El movimiento georgista y los orígenes del Andalucismo: análisis del periódico "El impuesto único" (1911–1923). Málaga: Editorial Confederación Española de Cajas de Ahorros, 1980. ISBN84-500-3784-0
↑ Barton, Stephen E. (2016). "Berkeley Mayor J. Stitt Wilson: Christian Socialist, Georgist, Feminist". American Journal of Economics and Sociology. 75 (1): 193–216. doi:10.1111/ajes.12132. hdl:10.1111/ajes.12132. ISSN0002-9246.
↑ "Some Suggestions for Reform of Taxation", Proceedings, 14th Annual Convention, League of California Municipalities, Santa Barbara, California, October 25, 1911, pp. 152–171. J. Stitt Wilson, "Report from California", The Single Tax Review, V.17, No.1, January–February 1917, pp. 50–52
1 2 Stewart, John (2001). Standing for justice: a biography of Andrew MacLaren, MP. London: Shepheard-Walwyn. ISBN0856831948. OCLC49362105.
↑ Orr, B. S. (2006–2007). Mary Elizabeth Lease: Gendered discourse and Populist Party politics in Gilded Age America. Kansas History: A Journal of the Central Plains, 29, 246–265.
↑ Caves, Roger W. Encyclopedia of the City. Abingdon, Oxon, OX: Routledge, 2005.
↑ Marsh, Benjamin Clarke. Lobbyist for the People; a Record of Fifty Years. Washington: Public Affairs, 1953.
↑ Jorgensen, Emil Oliver. The next Step toward Real Democracy: One Hundred Reasons Why America Should Abolish, as Speedily as Possible, All Taxation upon the Fruits of Industry, and Raise the Public Revenue by a Single Tax on Land Values Only. Chicago, IL: Chicago Singletax Club, 1920.
1 2 Gorgas, William Crawford, and Lewis Jerome Johnson. Two Papers on Public Sanitation and the Single Tax. New York: Single Tax Information Bureau, 1914. https://books.google.com/books?id=v3NHAAAAYAAJ
↑ Powderly, Terence Vincent (1889). Thirty Years of Labor. 1859–1889. Excelsior publishing house. Retrieved 8 December 2014. "It would be far easier to levy a "single tax," basing it upon land values." "It is because ... a single land tax would prove to be the very essence of equity, that l advocate it.
↑ "The Inquisitive Voter". The Great Adventure. 4 (35). September 11, 1920. The proposition of Henry George will do more to lift humanity from the slough of poverty, crime, and misery than all else.
↑ Steuer, Max (June 2000). "Review Article: A hundred years of town planning and the influence of Ebenezer Howard". The British Journal of Sociology. 51 (2): 377–386. doi:10.1111/j.1468-4446.2000.00377.x. PMID10905006.
↑ Harrison, F. (May–June 1989). "Aldous Huxley on 'the Land Question'Archived 2014-12-13 at the Wayback Machine ". Land & Liberty. "Huxley redeems himself when he concedes that, if he were to rewrite the book, he would offer a third option, one which he characterised as 'the possibility of sanity.' In a few bold strokes he outlines the elements of this model: 'In this community economics would be decentralist and Henry Georgian, politics Kropotkinesque and co-operative.'"
↑ Lora, Ronald; Longton, William Henry, eds. (1999). The Conservative Press in Twentieth-century America. Greenwood Publishing, Inc. p. 310. "Thus, the Freeman was to speak for the great tradition of classical liberalism, which [Albert Jay Nock and Francis Nielson] were afraid was being lost, and for the economics of Henry George, which both men shared."
↑ Kinsley, Michael. "The Capital-Gains Tax: A Tragedy in Two Acts". No.Dec 19, 2012. Retrieved 31 October 2014.Kinsley reiterates that George is his favorite economist and that land taxes are the best source of revenue.
↑ Riis, Jacob A. "The Unemployed: a Problem". (In Peters, John P., Labor and Capital, a chapter on "Socialism and the Single Tax", pp. 425-431. New York, 1902. 12°. Questions of the day, no. 98.)
↑ J. R. LeMaster, James Darrell Wilson, C. G. H. (1903). The Mark Twain Encyclopedia.
↑ Muse return with new album The Resistance "Sure, he has already launched into a passionate soliloquy about Geoism (the land-tax movement inspired by the 19th-century political economist Henry George)".
↑ Caldwell, John (1994). American paintings in the Metropolitan Museum of Art. New York: The Museum in association with Princeton University Press. ISBN978-0691037950.
↑ Schor, Esther (2006). Emma Lazarus. Random House. ISBN9780805242751– via Google Books. Author of "The New Colossus", on the Statue of Liberty, and the poem "Progress and Poverty", named after George's book, of which she said, "The life and thought of no one capable of understanding it can be quite the same after reading it."
↑ Peseroff, Joyce (March–April 2007). "Emma Lazarus". Tikkun. 22 (2). Retrieved 20 December 2014. Lazarus "supported Henry George's single tax".
