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Socialist conclusions from Georgist premises

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8/19/2013 1:39:11 PM
Posted: 4 years ago
Henry George did not have recourse to modern libertarian explanations of the cohabitation of "progress and poverty". There were barely any taxes to speak of, to say nothing of any being spent on the installation of a "welfare trap" (it was in any case evident that the poor were being worked to their natural limits and beyond).

The difference between gross and discretionary income was basically rent; it was (and still is) more bold-faced, more like a tax, than the surplus value the worker never got to see in the first place. Landlords must be thrown under the bus, George reckoned, if the property-owning class as a whole is to survive. So he poked out one eye where other economists had poked out both, and produced his all-devouring rent thesis; not only were workers being fleeced by their own landlords, but also indirectly by their bosses' landlords, who left bosses with no profit and therefore nothing to split with the workers.

But in defending his particular remedy, the single 100% tax on the unimproved value of land without compensation, he inadvertently went past a point of no return on the road to socialism. We must compensate landowners, said the more conservative subscribers to his thesis, who may have bought the land with money earned honestly, perhaps going into debt, with the expectation of recovering it through ground rents. George's retort, that to compensate them would be to rob the public in lump sum of exactly what the status quo promises to rob them of over time, is compelling until one considers that compensation needn't be funded publicly. After all, who is on the other side of the honest land-buyer's transaction? The dishonest seller, of course. And if he too is honest, there are nonetheless a finite number of steps to the original thief, who exchanged or whose descendants exchanged stolen land for "honest" capital.

But such sellers' own descendants cannot be identified and thus cannot be made to pay compensation, one might answer. Can't they? George's very thesis is that rents devour all, so how could anyone but a landlord have had anything to convert into capital in the first place? The capitalist-turned-landlord is thus a homecoming; no more rent-seeking than property in the converted forms of improvements or money.