The Taxation of Land Values

W. T. Symons

[Excerpted from The Coming of Community, published in 1931, London:
C.W. Daniel Company, pp. 150-61]

ARGUMENTATIVE NOTES

To describe private property in land as the root cause of human disabilities to-day is to deny the element of Time and the stream of dynamic expansion from the spirit in Man to the outer world.

It is to ascribe to humanity the static quality of the animal creation.

It is true that the power of the few over the many, the alienation of the many from the common birthright of all men, was partly accomplished by means of private ownership in natural resources, in the stuff of the earth; but with every addition to man's conquest over natural forces, every step away from the pastoral stage of human development, the centrality of that wrong has been shifted.

The discovery and application of electricity has removed a vast field of communal right from the land altogether; the heaped inventions that supersede the personal labour of man and counter the cycle of the seasons; the devices that hasten maturity and arrest decay, by application of artificial heat to growth and of artificial cold to perishable products of the earth; and above them all the passing of power from ownership of the earth to creation and destruction of the tokens by which its value is expressed. These have carried the 'root' back through the material to the immaterial, and have presented this age with a new, unprecedented and transcendent circumstance: Faith in man -Real Credit-is now the focus of world power, and no longer ownership of the earth upon which man lives.

The root question of our day is: who shall exploit the faith of mankind in the continuance of its own processes? Shall this total value-the modern equivalent of the primitive value, the earth-be converted into financial credit and used by mankind for mankind, or shall it continue to be exploited by the successors to the owners of the earth, who, with masterly subtlety, have converted the earth and the whole field of human endeavour into financial credit based upon Real Credit, and by this device have reduced the world to a private preserve for the sport of a giddy, fantastic control over the whole blossoming of man's irresistible fertility; control but not ownership, for to them ownership is anathema.

Money is power over other men, because it has become essential to exchange of commodities and property of all kinds, and because it can be created and destroyed by the stroke of a pen, and is not a commodity. If money then is both the means of exchange and the power to call or refrain from calling real wealth into being, it contains the whole possibility of man's movement over the surface of the earth, with all the development of human variety that has flowed from that movement. Man by this device is relieved from the necessity of standing upon one spot: his labour there may be converted into tokens exchangeable elsewhere. He need not follow one avocation from birth to death. His labour is cumulative in fact, and may be stored in tokens, and used at his leisure to explore not only the earth but his own mind. The genius of civilization consists in creation of something that survives the day's toil or the season's produce, something that is not the land, that is not his who labours.

It is the common overflow of all labour, not merely labour of the moment or labour measured by time, but labour in that other dimension-intensity, whereof the fruit, in mechanical invention and in the arts, accumulates and constitutes the cultural inheritance of mankind. The alienation of the entire cultural inheritance, of which the land is only the groundwork, is the root of modern distress.

The manna from heaven which must be consumed each day is now the psychic energy that each day produces, and the thwarting of that energy is the evil that is breaking the world in pieces.

It is vain to object that any man reaps where he has not sown. All men so reap and cannot do otherwise; their labour of to-day is but the finger-tip to the energy of the whole body of the race. Privilege is universal. To curtail the excesses of privilege-and that in one direction only-instead of expanding the limitless possibilities won by the whole torrent of man's soul, is to deny the conquest of the ages. In political terms it is to aid Conservatism in its rigid terror of expansion, in its rejection of all human fulness by denial of human achievement. In economic terms it is to foster the scarcity theory and bow to the subjection of all the realities of life to the token (money) system. Every man is the involuntary inheritor of the whole past, whatever the difference between men in the degree of their enjoyment of that inheritance.

It is necessary to abandon the conception of 'earning a living' as the test of human virtue, and to accept the full implication of the fact that a 'living' has been won-won with such overwhelming abundance that the evil forces of the world are expended in preventing plenty from reaching and fulfilling the great unsatisfied physical needs of mankind. The moral idea of service no longer requires emphasis on the physical plane. 'Earning a living,' in the sense of industrial employment, could easily become the privilege of a highly-skilled few, leaving the majority free to engage in occupations of infinite variety, whereby they might contribute vastly more to the unfolding of human destiny than could conceivably be attained by limiting the idea of world service to participation in the provision of its primitive necessities. The barrier laid across this human progression is that of the Token erected supreme over the Substance. That barrier needs the concentrated direction of the whole weight of the human tide to burst it. But by its removal all communal values, including land, could be returned to the community easily and continuously.

November 1926.

The "Single Tax" (so called because it is presumed that the whole revenue required by the State could be raised by the one levy) consists of the proposal that all land should be taxed to the full amount of its "economic rent," exclusive of all improvements. The underlying idea that private ownership of land has "no more foundation in morality or reason than ownership of air or sunlight" (1. Encyclo. Britt: Article on Henry George) is common ground. To Henry George falls the honour of having first worked out the proposal to give effect by this method of taxation to the equal right of all men to the use of the earth. The levy proposed by him was to be based upon the figure paid annually to the existing owner as rent, and it was assumed that the rent paid represents at any given time the highest price the land will fetch. "Nothing made by man would be taxed at all." (2. Ibid.)

The theory is attractive in its ideal justice and in its simplicity. It has drawn widespread attention from all over the world, especially amongst English-speaking people. But even at the time it was promulgated, 1879, the complication of modern mechanical invention, and the intensive exploitation of the earth, made separation of 'improvements' from the land itself a matter of extreme difficulty. Two critics in particular-one contemporary and one of the present day-are worth quotation because neither can be supposed to be hostile to the underlying intention.

Taussig writes:

"One fundamental obstacle is, as regards agricultural land, the difficulty of measuring the investment made in the soil and the normal return on it. Rent is not earmarked as a separate return-is inextricably mixed with the complex processes of tilling the soil and maintaining it." (3. F. W. Taussig, Ph.D., LL.D., Prof. Of Economics, Harvard University, in Principles of Economics, Vol. II, p.80.)

And again-

"The whole institution of private property would need to be overhauled -- in equity -- if this sort of proposal were put through. Land at its existing value cannot be treated on different principles from those applied to other kinds of property." (4. Ibid., Vol. II, p. 107.)

Dr. Hugh Dalton, Labour M.P. for Camberwell and Reader in Commerce at the London School of Economics, raises a series of practical points that have to be faced.

He writes:

"-two grave objections to a single tax (on land). The first is that it would not, in most modern communities, bring in enough revenue to balance the public accounts. The second is that it would be a very bad distribution of the burden of taxation. For a millionaire who owned no land would pay no taxes, while a poor man who had invested all his savings in the purchase of his house would pay in taxation a considerable portion of his income." (5. "Principles of Public Finance," Hugh Dalton, M.A., D.Sc. Econ., p. 42)

"The argument that the incidence of a tax on the value of land, as distinct from improvements, falls entirely on the landowners, assumes that the latter is already securing the highest rent that he can from his land. Where he is not doing so one of the effects of the imposition of a new tax, or the increase of an existing tax, may be to make him 'look sharply to his rents and take in the slack.' In this case part of the incidence will be upon the occupier.

" ... The practical valuation of land, as distinct from improvements, is often very difficult ... "

"The occupier of a building, if engaged in trade, may be able to shift part of the incidence ... on to the purchasers of his products." (6. Ibid., p. 61 and 62.)

These practical objections have been accentuated to an extreme degree as 'improvements,' in the widest sense, have rapidly outrun the value of the land, under the stimulus of mechanical power; the whole balance of the argument has been changed by the creation of entirely new communal values, those arising from discoveries and inventions of all kinds that lessen the demand for direct labour on 'land.' The value of all such 'improvements' should be credited to the community as soon as the original inventors and makers have been rewarded.

The principle enunciated remains unassailable, but its application, literally, to land would be conclusive and sufficient only in a primitive community; its application to land alone, were it possible without a cataclysm of evil consequences, would undoubtedly mitigate the pressure of poverty, even in a modern community. But the unavoidable injustice of its incidence to those who happen to be holders of such property to-day, and the immense disturbance of the 'collateral,' largely represented by deeds of land and buildings, held by Banks as security for loans and overdrafts to social and industrial enterprises that would result, compel a new analysis. Land in this country would be thrown wholesale upon the State; and all who had power to do so would withdraw and invest elsewhere, thus weakening the already diminished attractiveness of the land and reducing the return from its taxation.

To propose solution of the acute modern social distress by this means, is to fail to observe that a considerable part of agricultural land, in this country particularly, constitutes not an asset to the owner but a liability, and that money obtained by investment or labour in other fields has to be brought in to enable the owner to meet the barest charges of up-keep. This is not natural or right, for ultimate value is truly said to be in 'land,' but it indicates that the centre of gravity has shifted, that direct attack upon ownership of land to-day would not only fail to achieve justice, it would leave the greater part of the modern economic evil untouched.

The reason of this is not immediately apparent; it has to be sought in the ascendency of the tokens of wealth over the realities of wealth. In addition to the new orientation of the physical facts, this overwhelming circumstance has arisen, through development, parallel with the creation of fabulous communal values, of the modern money system. That system puts money into circulation at the time of production, lends it for payment of wages and dividends to the makers, but when the reclaimed land, the new machine, the new building, the new process-whatever it may be-ceases to be itself the product of labour for which remuneration is paid, and passes into the service of further production the system fails to cancel the money debt by the new wealth created. (7. "The Banker creates money for industrial purposes, or withdraws it, as he desires. ...The so-called captains of industry are more and more becoming puppets of the bankers. No nation in its senses would continue in such harness." -- Mr. John Wheatley in The New Leader, December 31st, 1926.)

The debt is carried forward into the new period, and the landowner, the farmer, the manufacturer, the municipal or State enterprise, is compelled, under threat of bankruptcy, to claim the costs of the capital 'improvement' from the public in the prices of articles of consumption, and , to maintain these increased prices long after the 'improvement' has in fact been paid for by the community, and the money so paid has been spent upon the bodily needs of those who created the addition to the community's wealth and received it in exchange for their labour.

The difficulty we have to meet is radical. The financial system ordains not only that exchanges shall be effected by means of money, it also prescribes that money shall not be put into circulation except in payment (through wages, salaries or dividends) for some expenditure of effort upon production (in the widest sense); and that every payment so made shall be included in prices, through which it is collected back again, returned to its source (the banks) and cancelled.

In conformity with this principle, the money withdrawn from land-owners by taxation of land values would in fact, be cancelled out of circulation. This would be accomplished directly, by repayment of Government debt to the banks or the banks' private borrowers, and consequent cancellation in bank ledgers; and indirectly, by the resultant 'contraction of credit,' the effect of which would be felt in lower remuneration to those engaged in the work of the community upon a 'cost of living' basis. The lower remuneration would inevitably reach a point of equality with the new (lower) level of prices that would result from the smaller quantity of money in cilculation. Thus the advantages of lifting the present claims of the landlord from production costs would be nullified by the financial system.

The system of thought and scale of values, which find expression in the financial system, are so fundamental that no solution of this Age's great material problems can lie in the realm of negation. A positive transcendence of idea and of technique is essential. We cannot solve our problem by the achievement of a reform which would-if completely successful-reestablish Arcadia. There must indeed be Arcadia, if only for replenishment of the earth with virile human beings-and for simple happiness. But the perilous achievement of men in leaving the breast of mother earth and adventuring in realms of nervous intensity, divorced from Arcadian existence, is not to be interpreted as perversion.

A primitive simplicity of life does not accord with the flowering of the intellect. Variety of food, clothing, surroundings-is essential to the sensitive modern, and with it a new order of simplicity, consisting in harmonious complexity. Art affords guidance on the dangerous road from mere addition of wants and powers to a poised mastery, in which form, colour, sound, texture, in infinite variety, become at once expression of the new soul and solvent of the inevitable stress accompanying her heightened sensibility. This condition is the result, at its deepest, of the altogether new assertion of human value, and of unmeasurable possibility in the individual, which is the essence of Christianity. It constitutes a new world, with new centres of gravity. It has necessitated the development of money, the token, to utmost flexibility-that the exchange of goods should be facilitated to the utmost. But men's powers have outrun their wisdom, and have called forth a subtle, overwhelming resistance. The token has become the check upon man's genius, irresistible in its perversion. But as the seed falls into the earth, and roots strongly before ascending again into stem and flower at the call of the sun, so it was necessary that the tremendous assertion of the individual will-to-power, should work in the earth first to lift the 'curse' of Adam. The material fruits of that intensification must be freely distributed amongst the generations that have come to birth amidst its prodigality.

Springing from the earth, based upon the earth, but harnessing the lightning, precipitating from the atmosphere the chemical replenishment of the earth's fertility; and releasing to his service the imprisoned sun that shone in past aeons-man has given a new meaning to 'land.'

The lightening of toil, made possible by transformation of the very earth itself into the marvels of mechanical contrivance-driven by solar energy to produce the work of a thousand unaided men-must be made to serve the purposes of all, inheritors as we all are of the prodigious labours and invention of the human race. The service must be without discrimination, as the rain falls upon the just and the unjust.

We live under a system which denies this, and works with superhuman cunning to prevent that consummation not only by imprisoning the aspiring human soul in his mere material achievement; but more, by pressing him back, in frustration and denial even of his conquests on that plane. So successfully has this restraint been imposed, that even now the call for 'economy,' the demand to 'work harder and consume less,' the heartbreaking scarcity,-are believed to be expressions of natural necessity, that may be alleviated here and there by philanthropic effort, and borne, with gruesome suffering, by inculcation of 'morality' in the name of 'economic law.'

The characteristic is that of a total reversal not of a partial misdirection. They shall not have "life more abundant." Nothing less than the antithesis of the true values, and inversion of the essential instrument of man's florescence, would serve to enthrone the power that arrests the world's progress and breaks man's spirit. For this reason, nothing less than concentration of human energy upon the establishment of true values in the new world, and the erection of the material instrument right way up, will serve to provide the physical basis upon which the freedom of man can be preserved. The greater includes the less. The restoration of land values to the people will be achieved-and can only be achieved-by restoration of power to the realities of world production, and imposition of servitude upon the mere tokens of those realities. The matter is spiritual and technical; not moral and political. It is for all to see and demand, and for a skilled few to work out, in conformity with the common vision and the universal desire, with no other criterion of success than fulfilment of that vision and satisfaction of that demand. The next step will not be disclosed until this one is taken.

November 1926, February and May 1927.