[Chapter VIII, from the book Social Adjustment,
published by The Macmillan Company, 1911, pp. 357-363]
The social panacea contrasts strongly with the reform movement. The
latter takes some one objectionable feature and aims to eliminate it
or palliate it; the panacea analyzes the entire field of activity,
evolves a theory based on maladjustment, and then, by the operation of
this theory, aims to readjust society on a same basis. The two great
modern examples of this form of panacea are the movements for single
tax and for socialism.
Both single tax and socialism hold to the doctrine of human capacity
and its possibilities in the presence of opportunity; both point to
maladjustments which seriously curtail opportunity, then each presents
a theory, the application of which will eliminate maladjustment and
afford universal opportunity.
Henry George, writing in his Progress and Poverty, published
in 1879, asked the question, "Why, in spite of the increase in
productive power, do wages tend to a minimum which will give but a
bare living ? " Starting with this question as a basis, he
attempts to solve the problem by a change in the methods of taxation.
Henry George points out the fact that in primitive communities there
is little difference between the richest and the poorest. In contrast
with this condition where the wealth is greatest, population densest,
and machinery most highly developed, there is the deepest poverty. "The
tramp comes with the locomotive, - and almshouses and prisons are as
surely the marks of 'material progress' as are costly dwellings, rich
warehouses, and magnificent churches. Upon streets lighted with gas
and patrolled by uniformed policemen, beggars wait for the passer-by,
and in the shadow of college and library and museum are gathered the
most hideous Huns and Vandals of whom Macaulay prophesied."
In these words George attempts to show the relation which now exists
between progress and poverty - the latter seemingly an inevitable
concomitant of the former. To do away with poverty is his object, and
for the attainment of this object he proposes his single tax.
To remedy the anomalous contrasts of progress and poverty and the
manifest unfairness of a taxing system which falls heaviest upon those
least able to bear it, Henry George proposes to abolish all taxes save
"one single tax levied on the value of land irrespective of the
value of improvements in or on it." All of the taxing machinery
would be done away except the machinery necessary to assess and tax
land values; hence the name "single tax."
In discussing the single tax, it must be borne in mind that this land
tax is a tax, not upon real estate, but upon land itself. Land is a
natural resource, something furnished by nature and used by man. Real
estate includes both the land originally provided by nature and the
improvements made upon it by man. The single tax would be a tax on
land values alone and would take for the use of the state the entire "unearned
increment" of land.
The single tax would cover the full economic value of the land. It
would be so high that no man could secure an income by merely holding
land. All of the income derived from land itself would be returned in
the form of a tax to the government. The income, on the contrary,
derived from the improvement on the land would not be taxed at all.
Hence the emphasis would be laid on improving land rather than holding
it unused for a rise in value.
The ideas of Henry George were advanced in the latter part of the
nineteenth century after the country had evolved to the most complex
stage of industrial civilization to which the world had thus far
attained. Had the theories been proposed for a new and developing
country, they might have had more chance of adoption, but they were to
be applied to a country whose institutions were thoroughly developed,
and whose traditions were set in the opposite direction. Men find it
hard to change habits of thought and traditionary ideas, and the
scheme of Henry George has proven a failure so far as an application
of its principles to the affairs of government has been concerned.
In the first place, Henry George drew his illustrations and ideas
from the most extreme cases which existed during the century. He saw
the great land grants in California lying idle, while unsuccessful
miners clamored for a place to earn a living. He saw the contrast
between the high wages incident to the discovery of gold and the low
wages which followed the private appropriation of all gold-bearing
land. He saw the slums of London, Philadelphia, and New York. He saw
the effect on Ireland of absentee landlordism.
Perhaps the most vital reason for the lack of growth of the single
tax movement has been the rather abstract character of its doctrine.
Without question, Henry George's statements of the single tax have
been effective in modifying the views of economists and thinking
persons in general, on matters relative to land monopoly and special
privilege. It is, on the other hand, undoubtedly true that the average
man finds it difficult or impossible to follow the single tax theory
and see the efficacy of the remedy which the single tax advances. It
is not like the labor union movement or the socialist movement, which
appeals directly to the people, and from which they can see the
possibility of a direct beneficial outcome. The single tax is
theoretical and requires an educated man to follow its arguments. For
the majority of the community it is merely a name.
Under modern conditions there has grown up in the community another
force, equally important with land in the production of wealth.
Machinery has come to stay. The single taxer proposes to socialize
land only, holding that when land has been socialized, the consequent
rise in wages will be sufficient to secure to the laborer sufficient
capital to further any enterprise in which he may be interested. As a
matter of fact, under modern conditions, with the possible exception
of the man who is panning gold or the fisherman or hunter, no man can
carry on a productive operation without a considerable amount of
wealth invested in capital. The farmer must have machinery and
animals. The woodsman must have many tools to convert standing timber
into lumber. The manufacturer of almost any staple commodity requires
a great mass of capital goods. The miner must be backed by a
considerable amount of capital before he can begin operations. In
short, all modern enterprises, while deriving their wealth mainly from
the soil, must depend intimately upon machinery if they are to be
successfully worked out.
The single taxer has rendered his chief service to the community by
causing the thinking element to regard in a new light the problems of
land monopoly and special privilege; he has pointed out the existence
of maladjustment and has indicated the way in which a number of
problems must be solved. But he has unquestionably failed in
presenting solution for maladjustment.
The single tax depends, for its application, upon an awakened social
conscience and an aroused feeling of social responsibility, but no
machinery is prepared for awakening the social conscience or for
arousing the feeling of social responsibility. The maladjustments
which Henry George points out are apparent, but his solution depends
upon an awakened social conscience, for the development of which he
suggests no method.
The theories of socialism differ radically from those of the single
tax. Both theories point to maladjustment, but while the single taxer
proposes to take the unearned increment of land, the socialist
purposes to socialize capital.