American Civics Research Library
Saved money isn't wealth
from
Progress and Poverty
Henry George, 1882
Pages 66 - 67
"Here is a luxurious idler, who does no productive work either with head or hand, but lives, we say, upon wealth which his father left him securely invested in government bonds. Does his subsistence, as a matter of fact, come from wealth accumulated in the past or from the productive labor this is going on around him? On his table are new-laid eggs, butter churned but a few days before, milk which the cow gave this morning, fish which twenty-four hours ago were swimming in the sea, meat which the butcher boy has just brought in time to be cooked, vegetables fresh from the garden, and fruit from the orchard - in short, hardly anything that has not recently left the hand of the productive laborer (for in this category must be included transporters and distributors as well as those who are engaged in the first stages of production), and nothing that has been produced for any considerable length of time, unless it may be some bottles of old wine. What this man inherited from his father, and on which we say he lives, is not actually wealth at all, but only the power of commanding wealth as others produce it. And it is from this contemporaneous production that his subsistence is drawn.
The fifty square miles of London undoubtedly contain more wealth than within the same space anywhere else exists. Yet were productive labor in London to absolutely cease, within a few hours people would begin to die like rotten sheep, and within a few weeks, or at most a few months, hardly one would be left alive. For an entire suspension of productive labor would be a disaster more dreadful than ever yet befel a beleaguered city. It would not be a mere external wall of circumvallation, such as Titus drew around Jerusalem, which would prevent the constant incoming of the supplies on which a great city lives, but it would be the drawing of a similar wall around each household. Imagine such a suspension of labor in any community, and you will se how true it is that mankind really live from hand to mouth; that it is the daily labor of the community that supplies the community with its daily bread."
Government Bonds
page 171
"Nothing can be capital, let it always be remembered, that is not wealth - that is to say, nothing can be capital that does not consist of actual, tangible things, not the spontaneous offerings of nature, which have in themselves, and not by proxy, the power of directly or indirectly ministering to human desire.
Thus, a government bond is not capital, nor yet is it the representative of capital. The capital that was once received for it by the government has been consumed unproductively - blown away from the mouths of cannon, used up in war ships, expended in keeping men marching, and drilling, killing and destroying. It does not represent capital at all. It is simply a solemn declaration that the government will, some time or other, take by taxation from the then existing stock of the people, so much wealth, which it will turn over to the holder of the bond; and that, in the meanwhile, it will, from time to time, take, in the same way, enough to make up to the holder the increase which so much capital as it some day promises to give him would yield him were it actually in his possession. The immense sums which are thus taken from the produce of every modern country to pay interest on public debts are not the earnings or increase of capital - are not really interest in the strict sense of the term, but are taxes levied on the produce of labor and capital, leaving so much less for wages and so much less for real interest."
Perceived wealth
page 35
"Increase in the amount of bonds, mortgages, notes, or bank bills cannot increase the wealth of the community that includes as well those who promise to pay as those who are entitled to receive. The enslavement of a part of their number could not increase the wealth of a people, for what the enslavers gained the enslaved would lose. Increase in land values does not represent increase in the common wealth, for what land owners gain by higher prices, the tenants or purchasers who must pay them will lose. And all this relative wealth, which, in common thought and speech, in legislation and law, is undistinguished from actual wealth, could, without the destruction or consumption of anything more than a few drops of ink and piece of paper, be utterly annihilated. By enactment of the sovereign political power debts might be canceled, slaves emancipated, and land resumed as the common property of the whole people, without the aggregate wealth being diminished by the value of a pinch of snuff, for what some would lose others would gain. There would be no more destruction of wealth than there was create of wealth when Elizabeth Tudor enriched her favorite courtiers by the grant of monopolies, or when Boris Godoonof made Russian peasants merchantable property."
The Single Tax system
was advanced by 19th century political economist, Henry George in his thesis Progress
and Poverty. It is premised on the maxim of 'abolition of private property in land, and application of rents to public purposes.' Yes, that's the first plank of the
Communist Manifesto, but that is where all similarities to that Marxist doctrine cease.
The Single Tax theory proposes to eliminate all other forms of taxation save that of a tax on land values only. No income tax, property tax, sales tax, etc.
We have a form of the single tax in place, today, with our current property taxing system. Our property tax bills itemize land value separately from property. However, not all who hold land pay for its use (i.e. J.D. Irving, Great Northern Paper, etc.)
Under the Single Tax system, all land would be owned by We the People, one must not go into debt, or pay a large selling price in order to obtain use of said land. Merely find some which is available, notify the State and begin paying rent.
Some of the advantages of a Single Tax system are:
1. Land will not be held unproductively for speculative purposes because it can not be sold and there is a tax assessed on it regardless of the produce obtained from it. Unproductive land would still owe a tax - so the holders who choose not to produce would throw it open to others who
will.
2. Any who wish to have land will be able to obtain it for little to no initial expense in order to provide for themselves. This would reduce the labor pool and require jobs to compete for laborers, instead of laborers competing for jobs. Wages would, thus, rise.
3. With no tax on incomes, or sales, a person can produce as much as he can without fear of seizure or confiscation.
4. With no tax on property, buildings, etc. a person can acquire as much as he can without any additional taxation.
5. Because more people would be able to affordably provide for themselves, there should be less pauperism, poverty, crime, etc. thereby reducing the strain of government services (i.e. welfare, police, judges, prisons, etc.)
6. While land is commonly owned, the improvements thereon (buildings, etc.) would be protected from the theft/use of others - especially the State.
7. In a sparsely populated area, the land value would be lower hence, taxes lower.
8. Because there would be no tax on improvements, the community would benefit from a greater variety and number of improvements made by the citizenry.
The one problem with a Single Tax system was not addressed by Mr. George in his thesis: Progress and Poverty and that is of very bad people in charge...of everything. Over time, corrupt or otherwise ignorant politicians and bureaucrats could take control of the land owned by We the people. Instead of waiting and collecting the money at a future date, these managers would then pledge the land entrusted to their care to private banks as collateral in exchange for unpayable loans of fiat paper money. The banks would then, by default, become the de facto owners of the land - in direct conflict with the original maxim of the Single Tax system; all land owned by We the People.
We currently are unable to implement a Single Tax system while the Federal Reserve Bank holds all land and future labor as collateral against unpayable loans to our government and society at large. Having a large central bank, such as Marx advocated, would be detrimental to the freedom and individual sovereignty a Single Tax system would allow to the inhabitants of the society which adopted it.