January 2018

The false dichotomy of liberty vs equality, or markets vs socialism, is exposed when one examines the role of land. Once you see it, you can’t unsee. — Edward Miller

Check Out the new “American Experience” Documentary on The Gilded Age

Readers of this newsletter will want to tune in to PBS’s American Experience on February 6th for a new documentary on the Gilded Age. Here’s the trailer, which describes the period of the last three decades of the 19th century as “an age of possibilities,” “an age of extreme wealth,” and “an age of extreme poverty.

The term Gilded Age comes from the 1873 novel The Gilded Age: A Tale of Today by Mark Twain. It’s revealing that the term is “Gilded” rather than “Golden” – implying a surface prettying-up, a patina applied over an underlying reality that was much grittier.

The times we’re living through are often described as a “New Gilded age.” We often hear Donald Trump bragging about the strong stock markets and high productivity over which he presides — but these economic gains tend to only benefit those at the very top of the economy.

Henry George was one of the seminal voices of the Gilded Age. George, who had experienced extreme poverty in his own life, wrote with deep feeling and empathy about the abject suffering that seemed inextricably tied to economic progress.

The documentary devotes at least ten minutes to George — his hardscrabble early history, and his dramatic mayoral race. There is even a separate trailer about this segment of the film, which elevates George to the level of fame enjoyed by Andrew Carnegie and J. P. Morgan. Unfortunately, though, filmmaker Sarah Colt emphasizes Henry George’s biography and his easily-understood role as a spokesman for popular discontent — without mentioning his analysis. Viewers of this documentary will see Henry George as a compelling voice that described the yawning divide between rich and poor, as when he wrote: “It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down.”

Apparently, Colt mentions neither Henry George’s explanation of the fundamental cause of these problems, nor his proposed solution. The problem of deepening poverty along with material progress remains, in the viewer’s mind, a matter of society’s inevitable power dynamic between Haves and Have-nots.

Fans and devotees, desperate to leverage any mention of Henry George in popular media, will see this film as cause for celebration. Serious readers of George, however, are more likely to throw up their hands in frustration at one more in a long list of references to Henry George as a self-taught guy who had nothing of any great consequence to add to economic analysis, and whose ideas certainly have no practical relevance today.

It’s worth noting that Mark Twain didn’t damn Henry George with that sort of faint praise. Twain was quoted as saying, “The earth belongs to the people. I believe in the gospel of the single tax.” The pointedly Georgist article “Archimedes” appeared in Henry George’s newspaper The Standard under the byline “Twark Main,” and Twain scholars have endorsed it as Twain’s work. Also – and more important to the current discussion – The Gilded Age, in 1873, was all about land speculation. The quest to get rich from simply owning a piece of well-placed ground is the backbone of the book’s plot. And so it should be, for the appropriation of the community’s work, as it piles up in the unearned rent of land and natural resources, underlies “progress and poverty” just as much today as it did in the first “Gilded Age.”

Ed Dodson Shares SOTU Response

Our stalwart colleague, Ed Dodson, has composed and recorded a video response to President Trump’s state of the Union message. Ed has provided us with a video that is sober, cogent, thoughtful and well worth your consideration. Perhaps it’s not scintillating, but, hey, if you can listen to Trump bloviate for 90 minutes, you ought to be able to handle Ed for eight.

A Milestone for The Progress Report

Lawrence Bosek, Editor at www.progress.org, writes: I have some exciting news! The progress Report has reached a milestone of 1000 followers on Facebook this week. Thanks to contributors such as yourself, our site is growing and we are spreading our resource sharing messages farther than before. Thank you all and please keep up the excellent work.

This year has even more growth in the plans. I will send out another update when the plans have been solidified. Meanwhile, if you have any other ideas or know of anyone else that has ideas to share, please send them my way.

Articles You Shouldn’t Miss

New York Times: The Subways Made Them Rich. Is It Time for Them to Pay Up?

New York Times: The Next Crisis for Puerto Rico: A Crush of Foreclosures

Bloomberg News: Faster Growth Begins With a Land Tax in U.S. Cities

New York Times: Flood Map Revision Sets Up New York Real Estate Battle

Scottish Land Commission: Land Commission to Look at Potential for Land Value Taxes n Scotland

Bloomberg News: Land Is Underrated as a Source of Wealth

Georgist Site of the Month

Rumour has it that these blokes may be changing their name from “The Single Tax and Natural Energy Band” to simply “Natural Energy Band” — a change that deserves support, I’d say — for the single tax message of this set of songs by John Harris and friends comes through loud and clear. Don’t be put off by the kludgy appearance of their website; these guys are rockers, not coders. But give their songs a listen! They are providing us with some sorely-needed “movement music” that will get you moving.

1 thought on “January 2018

  1. An alternative (but equivalent) to LVT which has less opposition from the landlords.

    Much as I applaud the Single Tax idea of Henry George for having great ethical principles at heart, I find after more than 50 years in our Movement that its introduction is simply not practical. Apart from use of the word “Tax”, which in any case no politician wants to propose, we must eliminate the offense that our proposals for LVT causes to landlords. Obviously they will strongly oppose the proposal for having to pay a new tax (or anything else we might like to call it). The problem then is not to have to fight them, nor try to convince them on moral grounds, but how to make them want to pay for land access rights or revenues.

    To achieve this there should be introduced a gradual change in the way that land is being owned, which should be introduced by new laws. Whenever a site or prospect of land is being offered for sale (possibly with its buildings, etc.,) and whenever ownership of such a site is being transferred between family members (and on which an inheritance-tax would normally be paid), the change is that government automatically buys the land at its current normal nominal price. This is done simultaneously when the buildings are sold in the usual way or their ownership is being transferred. (The courts shall be empowered to settle the land-value, if/when doubt is expressed–land-value maps being publicly accessible.)

    The previous landlords or their heirs will no longer have any political objection, since the money from the land sale will greatly exceed the subsequent annual lease-fee (see below) for access rights to this land. This change will also eliminate the (hated) inheritance-tax. It is imagined that this process of land sales and governmental purchases will be spread over at least 40 years.

    Immediately when the site belongs to the government, this land must be offered for lease to the new or bequeathed owner of any buildings thereon. The lease-fee should be set according to normal amounts of rent for other similar sites, (and again the courts should decide when there is disagreement.) The above “first refusal” for this leasing offer is most necessary, because any buildings of practical use and value on the site, will still be sold or bequeathed as items of durable capital goods, as before.

    However, access to the site and its buildings should be denied by the government until the site is leased by someone who can then (and normally would) have purchased (or been given) the building in the usual way. All taxes that are applied to subsequent building developments should be abolished at this time.

    A new owner would acquire the building property more cheaply than before, because it is now without the price of the land under and around it. Such a buyer can then give for hire (rent-out) any building for access and use, as if it were any other item of durable capital goods. In the unlikely event of the leaser not owning the buildings, his/her incoming land rent (from the building owner), shall not exceed the out-going lease-fees by more than 2% (say). Should nobody
    initially lease the site and its buildings (if any), because of there being no demand for their use, the buildings may be pulled down by the next (eventual) leaser, who will be free to re-develop the site (and would naturally want to do so).

    The government should borrow the money for site purchase, or can even offer national redeemable bonds to raise money for it. As the lease money begins to flow to the government, it uses this to:

    a) repay part of its loan for site purchase, which may be extended,

    b) purchase more sites as and when they become available,

    c) cover the interest on the loan and on the new bonds and their eventual redemption, and eventually

    d) reduce other kinds of taxation.

    It will be appreciated that over the long term the lease fees are equivalent to LVT, but due to the greed of landlords (who behave as if they were capitalists), their income from land sales will satisfy them better than their being taxed. Eventually nearly all the land would then be leased from the government.

    Nationally leased land, in countries like Hong Kong, is close to 100%. This approach is known to be most successful, for the rate of growth of prosperity. Also when the previous landlords have more money to spend, most of it will be invested in durable capital goods, making production costs lower as obsolescent durable items are more easily replaced and so the national prosperity will grow also from the government’s investment in land values.

    This proposal is not land nationalization (at least no more than what currently applies), since no additional regulations are placed on how the land is to be used.

    Because the selling of land is a natural process which is (if anything) encouraged by the land returning to public benefit, the resulting lower priced buildings will become more easy to sell and this will not place such a limitation on their owners who wish to better develop the sites.

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