Social Panaceas

Scott Nearing

[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.