Anyone familiar with the Individualist tradition in America has encountered the Single Tax movement. It is sometimes called Georgism after its formulator and foremost advocate Henry George (1839-1897). Georgism links the poverty and injustice of society to the usurpation of land and advocates the imposition of a single tax on land (“economic rent”) as a solution. That is, land should be viewed as common property with payment for use — a single tax — going toward society. Several prominent individualists have championed the single tax, including Albert Jay Nock and Francis Neilson, founders of The Freeman. Yet the doctrine has attracted equally prominent critics both in the 19th century and now.
When George’s key work Progress and Poverty; An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth; The Remedy appeared in 1880, the veteran land-reformer Josuah K. Ingalls waged war against the book. His attack, “Henry George Examined. Should Land Be Nationalized or Individualized?” was published as a special supplement in Benjamin Tucker’s periodical Liberty. Ingalls accused George of trying to convert the State into a monopoly landlord by allowing it to collect “economic rent” from every landowner. Tucker himself wrote and published “Henry George, Traitor” (1896). Although the primary theme of Tucker’s pamphlet was not an assault upon the single tax, it reflected a deep antagonism between Tucker and George which dated back to the Single Tax. More recently, the 20th century Austrian economist Murray N. Rothbard excoriated Georgism.
Nevertheless, Georgism should command attention for several reasons. It is one of the few 19th century individualist movements to have survived into the 20th and 21st centuries with its basic theory intact. Moreover, Progress and Poverty was a best-selling sensation of its day, which remains well read despite being a 19th century political tract. As a result of the book, George became an internationally acclaimed lecturer. Moreover, his 1886 run for mayor of New York City was probably the most successful ‘libertarian’ political campaign in American history. (Some would quarrel with using the word ‘libertarian.’)
What is the attraction of Georgism? Why has opposition to it been so bitter? An answer to these questions must include an analysis of Henry George, the man.
A BRIEF BIO OF HENRY GEORGE
Henry George (1839-1897) was born in Philadelphia into a middle class family. Although he briefly attended school and had some private tutoring, he was largely self-taught and independently minded. At 16, he shipped out on a vessel bound for Melbourne and Calcutta. Australia was a booming, productive nation. India was heart wrenchingly poor, with the bloated bodies of the poor floating in the rivers his ship navigated. George filed the contrast away.
After returning home, he became a typesetter and went West to seek his fortune in California. Eventually, George came to edit his own paper, the San Francisco Daily Evening Post. There, he wrote of the land speculations and monopolies that tightened the grip of the already powerful upon California real estate. He vigorously criticized railroad and mining interests, as well as corrupt politicians.
The brutal depression of 1873 caused George to ask himself, “why do depressions happen?” If depressions were not inevitable in an economic cycle, then what was their cause…and cure?
George wrote about what he called “the ultimate paradox”: modern society brought increased prosperity and progress, as well as increased poverty. The more wealthy society became, the more poverty it contained. George asked two additional questions: “What caused poverty?”; and, “Was there a solution?” He concluded that the economic problems of the poor stemmed from their inability to access land. The growth of population increased the value of land, thus working people had to pay more to use it. Large landowners who did not work their own property became wealthy at the expense of those who did.
He became convinced that there were only three valid factors involved in producing wealth: natural resources, labor (wages), and capital (interest). Since natural resources had been created by no one, they could be exclusively claimed by no one. If natural resources were unappropriated — that is, equally free to all — then production would be divided between labor and capital. If natural resources were appropriated, however, then a producer should pay ‘rent’ for those resources. After all, such use denied equal access to others.
His theory was more than this, however. The value of land and, so, of the economic rent was largely determined by social factors, such as the number of people who wanted land and the transportation system that offered access. George went so far as to say that the value of land was created by the community. Thus, the rent should go to the community and not to any individual.
George first worked out these principles in his pamphlet “Our Land and Land Policy, National and State” (1871). They became fully developed in Progress and Poverty (1880). The first edition was self-published, with George issuing five hundred copies. When Appleton issued the next edition, the book became a best seller, translated into several languages. George became famous overnight, especially as an international lecturer. In America, the popular press welcomed his columns and articles on political and social problems.
GEORGE ON THE STATE
Progress and Poverty concludes with the statement that good men are corrupted by contact with government. Nevertheless, George may have viewed politics as a necessary evil. He ran as a 1886 mayoral candidate in New York City for the United Labor Party. Surprisingly, George obtained a large vote total, coming in second. But attacks during the vicious election campaign had severely damaged his reputation. Albert Jay Nock considered George’s candidacy to be his downfall. In his book Snoring As A Fine Art, Nock explained, “With this, whatever credit he may have had in America as an economist and philosopher vanished forever, leaving him only the uncertain and momentary prestige of a political demagogue, an agitator, and a crank.”(p.81)
Nevertheless, Single Tax clubs sprang up across America, encouraged by George’s paper, the New York Standard (1887-1892). By 1897, George agreed to run again as mayor as an independent Democrat. In poor health and blatantly disregarding his doctor’s orders, George died on October 29, 1897, near the end of his campaign; his son completed the campaign but did poorly. More than a hundred thousand people turned out at George’s funeral.
Georgism began to decline. For example, an ambitious state campaign occurred in Delaware (1896) where Single Taxers attempted to elect a governor and take over the state legislature. After proving the ‘single tax’ could work in one state, the radicals intended to carry the theory to a federal level. They received only 3% of the vote.
Some people believe Georgism faltered because it depended too strongly upon the dynamic personality of its leader and could not survive his passing. Others point to the economic times in which the philosophy arose. Progress and Poverty was written during a period when vast fortunes were being made from natural resources and, so, powerful political forces opposed the single tax. The Single Taxers were outgunned.
A common explanation of Georgism’s failure is that the philosophy itself is flawed and, ultimately, would strengthen collectivism and the state, not individualism. In this vein Tucker asked a fundamental question: How can a collective like society own land if such ownership is improper for individuals? Either land could be owned by an individual — and, thus, sold or transferred to another individual — or it was not subject to ownership at all. He considered collective ownership to be a contradiction in terms. Or, as Tucker might ask, “Can I sell my share? No? Then I don’t own it either individually or as part of a collective.”
It is to such critiques of Georgism that Part II of this article will turn.