Did Georgist economics fail during Reconstruction? -Cliff Cobb, AJES
Reconstruction is the name given to the period from 1863 to 1876, from the Emancipation Proclamation to the Compromise of 1876, by which Tilden withdrew his candidacy and allowed Hayes to become President of the U.S., in exchange for the withdrawal of federal troops from the South. During the brief period, we got a glimpse of how states would be governed if former slaves and dispossessed whites were given a chance to participate fully in the political process.
In his 1988 book, Reconstruction, Eric Foner summarized (pp. 375-376) the policies that dealt with land, which had been mostly held by a small planter elite before the Civil War. In South Carolina alone, a massive land redistribution program took place, with about 14% of the black population gaining title to land that the state sold on long-term credit. “Rather than emulate South Carolina, Republicans in other states chose to employ taxation as an indirect means of weakening the plantation and promoting black ownership.” The poll tax had dominated the South before the war. Now an ad valorem tax on real and personal property became the main source of state revenue, although the poll tax was not eliminated. Prior to the war, the low property tax rates had been self-assessed, but now the state sent officials to make assessments. “Rising taxes quickly emerged as a rallying cry for Reconstruction’s opponents, but many blacks hoped high levies would make extensive holdings of uncultivated land unprofitable and force real estate onto the market.” For example, in Louisiana, less than 10% of the farmland was being cultivated after the War. In Mississippi, 20% of the land was forfeited to the state for non-payment of taxes. State laws then required that such land be sold in small lots to make it available to poor farmers. But the experiment largely failed. Northern speculators bought much of the land that was put up for auction at prices higher than any small farmer could afford. And title to the land was never secure. “In Mississippi, 95 percent of the forfeited acreage eventually found its way back to the owner.” It may have been better than the system before the war, “but as a means of land distribution, it proved singularly ineffective.”
That is Foner’s final judgment: ineffective. But the system of redistribution through taxation only operated for a few years, five or six at the most. What this story really reveals is the importance of state power to enforce laws. The mechanisms of the Georgist tax policy seem to have worked remarkably well in breaking up plantations, but the collapse of state power made it impossible to follow through on the land revolution. Foner makes clear that the libertarian philosophy of the Republican leadership actually doomed the system from the start. “Most white Republicans, and many freeborn blacks, while perfectly willing to guarantee the freedmen their rights as free laborers and equal citizens, opposed using the power of the state to redistribute property.” Although the labor of slaves had created the economy that gave value to the land of the South, the pristine logic of “free labor” did not admit of any such calculations. As in the libertarian philosophy of our own day, history counted for nothing. A more historically equitable solution would have been to combine the South Carolina system of direct land redistribution (with delayed repayments) with the indirect tax system adopted in other states.