Georgism

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Georgism proved to be an entry point for some into either [[Progressive|Progressivism]] or [[Libertarianism]], as many founders of both movements got their start as political activists as Georgists.  George's views on land were egalitarian and appealed to those with a desire to alleviate the squalor of the working classes during the early Industrial Revolution, while his views on other matters were laissez-faire and free market oriented, on the assumption that his land tax was all government needed to fund beneficial expenditures.  Depending on which of George's views one took the ball and ran with, Georgism could be an entry point in either direction.  Examples include John Dewey, one of the founders of the Progressive movement; and on the other hand, Albert Jay Nock, Frank Chodorov, and others associated with ''The Freeman'' magazine of the 1920s, which began as a Georgist publication but with some writers who were also libertarian. <ref>Robert Clancy [http://www.cooperativeindividualism.org/clancy-robert_freeman-and-we-georgists-1957.html The Freeman and We Georgists], 1957</ref>
 
Georgism proved to be an entry point for some into either [[Progressive|Progressivism]] or [[Libertarianism]], as many founders of both movements got their start as political activists as Georgists.  George's views on land were egalitarian and appealed to those with a desire to alleviate the squalor of the working classes during the early Industrial Revolution, while his views on other matters were laissez-faire and free market oriented, on the assumption that his land tax was all government needed to fund beneficial expenditures.  Depending on which of George's views one took the ball and ran with, Georgism could be an entry point in either direction.  Examples include John Dewey, one of the founders of the Progressive movement; and on the other hand, Albert Jay Nock, Frank Chodorov, and others associated with ''The Freeman'' magazine of the 1920s, which began as a Georgist publication but with some writers who were also libertarian. <ref>Robert Clancy [http://www.cooperativeindividualism.org/clancy-robert_freeman-and-we-georgists-1957.html The Freeman and We Georgists], 1957</ref>
  
Modern awareness and consideration of Georgism are rare<ref name=NGM08/>.  It is not usually seen as practical, since it is technically and politically challenging to implement<ref>Murray Rothbard. [http://www.mises.org/rothbard/georgism.pdf The Single Tax: Economic and Moral Implications and A Reply to Georgist Criticisms]</ref><ref>David J. Heinrich. [http://archive.mises.org/1610/murray-rothbard-and-henry-george/ Murray Rothbard and Henry George]</ref><ref name=DN98> Dick Netzer. [http://www.lincolninst.edu/pubs/PubDetail.aspx?pubid=426&URL=Land-Value-Taxation---Could-It-Work-Today-&Page=2 Land Value Taxation: Could It Work Today?] March 1998</ref>.  Concerns over balancing revenue raised with political feasibility is a problem due to <ref name=NGM08>N. Gregory Mankiw. [http://books.google.co.nz/books?id=fIj2bLjFn-oC&pg=PA169&lpg&source=bl&ots=mSln-zb5ZB&sig=M1PabpGeqrtsqVQ9B4ugeqS7H7U&hl=en&sa=X&ei=tSP0UrGSN8jdkgXtpYCwDw&ved=0CEIQ6AEwBA#v=onepage&q&f=false Principles of Microeconomics] 2008, page 169</ref><ref name=DN98/> widespread public skepticism of new taxes<ref>[http://www.economist.com/news/finance-and-economics/21580130-governments-should-make-more-use-property-taxes-levying-land Levying the Land] ''The Economist''</ref>, so even if optimal, Georgism is not considered to be practical by economists and policymakers. However, there are still some determined economists and activists searching for a silver-bullet economic policy who turn to Henry George.<ref>[http://online.wsj.com/news/articles/SB10001424127887323826704578354733775359470 It's a Lonely Quest for Land-Tax Fans, But, by George, They Press On], Wall Street Journal</ref>
+
Modern awareness and consideration of Georgism are rare<ref name=NGM08/>.  It is not usually seen as practical, since it is technically and politically challenging to implement<ref>Murray Rothbard. [http://www.mises.org/rothbard/georgism.pdf The Single Tax: Economic and Moral Implications and A Reply to Georgist Criticisms]</ref><ref>David J. Heinrich. [http://archive.mises.org/1610/murray-rothbard-and-henry-george/ Murray Rothbard and Henry George]</ref><ref name=DN98> Dick Netzer. [http://www.lincolninst.edu/pubs/PubDetail.aspx?pubid=426&URL=Land-Value-Taxation---Could-It-Work-Today-&Page=2 Land Value Taxation: Could It Work Today?] March 1998</ref>.  Concerns over balancing revenue raised with political feasibility is a problem due to <ref name=NGM08>N. Gregory Mankiw. [http://books.google.co.nz/books?id=fIj2bLjFn-oC&pg=PA169&lpg&source=bl&ots=mSln-zb5ZB&sig=M1PabpGeqrtsqVQ9B4ugeqS7H7U&hl=en&sa=X&ei=tSP0UrGSN8jdkgXtpYCwDw&ved=0CEIQ6AEwBA#v=onepage&q&f=false Principles of Microeconomics] 2008, page 169</ref><ref name=DN98/> widespread public skepticism of new taxes<ref>[http://www.economist.com/news/finance-and-economics/21580130-governments-should-make-more-use-property-taxes-levying-land Levying the Land] ''The Economist''</ref>, so even if optimal, Georgism is not considered to be practical by most economists and policymakers. However, there are still some determined economists and activists searching for a silver-bullet economic policy who turn to Henry George.<ref>[http://online.wsj.com/news/articles/SB10001424127887323826704578354733775359470 It's a Lonely Quest for Land-Tax Fans, But, by George, They Press On], Wall Street Journal</ref>
  
While most economists dismissed George in his time<ref>Phillip J. Bryson. [http://www.econbiz.de/Record/the-economics-of-henry-george-history-s-rehabilitation-of-america-s-greatest-early-economist-bryson-phillip/10009244496/Description#tabnav The Economics of Henry George : History's Rehabilitation of America's Greatest Early Economist], 2011</ref> and most today spare very little thought for the subject, Georgism and land value taxation is seeing a revival in certain parts of the blogosphere.<ref>Ashok Rao.  [http://www.slate.com/blogs/moneybox/2013/10/17/land_value_tax_revenue_how_much_can_we_raise_by_taking_unimproved_land.html How Much Money Could a Land Value Tax Raise?].  ''Slate''.  2013 October 17.</ref><ref>Noah Smith.  [http://qz.com/169767/the-century-old-solution-to-end-san-franciscos-class-warfare/ This 100-year-old idea could end San Francisco’s class war].  ''Quartz''.  2014 January 23.</ref><ref>Matthew Yglesias.  [http://www.slate.com/blogs/moneybox/2012/06/14/property_taxes_are_a_barbarous_relic_tax_land_instead.html Property Taxes Are A Barbarous Relic: Tax The Value of Land Instead].  ''Slate''.  2012 June 14.</ref><ref>Jesse Myerson.  [http://www.salon.com/2013/11/22/end_the_1_percents_free_ride_how_taxing_land_would_solve_americas_biggest_problems/ End the 1 percent’s free ride: Taxing land would solve America’s biggest problems].  ''Salon''.  2013 November 22.</ref><ref>Jesse Myerson.  [http://www.rollingstone.com/politics/news/five-economic-reforms-millennials-should-be-fighting-for-20140103 Five Economic Reforms Millennials Should Be Fighting For].  ''Rolling Stone''.  2014 January 3.</ref>
+
While most economists dismissed George in his time, land value taxation is seeing a revival in economics and the blogosphere.<ref>Phillip J. Bryson. [http://www.econbiz.de/Record/the-economics-of-henry-george-history-s-rehabilitation-of-america-s-greatest-early-economist-bryson-phillip/10009244496/Description#tabnav The Economics of Henry George : History's Rehabilitation of America's Greatest Early Economist], 2011</ref><ref>Ashok Rao.  [http://www.slate.com/blogs/moneybox/2013/10/17/land_value_tax_revenue_how_much_can_we_raise_by_taking_unimproved_land.html How Much Money Could a Land Value Tax Raise?].  ''Slate''.  2013 October 17.</ref><ref>Noah Smith.  [http://qz.com/169767/the-century-old-solution-to-end-san-franciscos-class-warfare/ This 100-year-old idea could end San Francisco’s class war].  ''Quartz''.  2014 January 23.</ref><ref>Matthew Yglesias.  [http://www.slate.com/blogs/moneybox/2012/06/14/property_taxes_are_a_barbarous_relic_tax_land_instead.html Property Taxes Are A Barbarous Relic: Tax The Value of Land Instead].  ''Slate''.  2012 June 14.</ref><ref>Jesse Myerson.  [http://www.salon.com/2013/11/22/end_the_1_percents_free_ride_how_taxing_land_would_solve_americas_biggest_problems/ End the 1 percent’s free ride: Taxing land would solve America’s biggest problems].  ''Salon''.  2013 November 22.</ref><ref>Jesse Myerson.  [http://www.rollingstone.com/politics/news/five-economic-reforms-millennials-should-be-fighting-for-20140103 Five Economic Reforms Millennials Should Be Fighting For].  ''Rolling Stone''.  2014 January 3.</ref>
  
 
==Footnotes==
 
==Footnotes==

Revision as of 14:21, 7 February 2014

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The dismal "science"

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Georgism or geoism is a political philosophy developed by American 19th century economist Henry George, the primary focus of which is the "Single Tax" on land values, also known as the Land Value Tax. There are many variations on this philosophy, but most would agree with the following central tenet:

  • Land was not created by humans and thus nobody can claim greater access rights than anyone else. Thus land of any kind should be treated as common property via a tax on the unimproved value of land, to prevent the kind of natural monopoly that comes with land ownership. Georgists advocate recapturing as close to the full rental value as possible.

This system is widely recognized to have the distinct advantage of eliminating all "dead-weight loss" that all other taxes create. Only land that has value is taxed, and taxed according to that value. It avoids the disincentives towards productive activity by untaxing improvements to land. However, the "unimproved land value" necessary for the tax is a contentious point indeed. The market price of land decreases as the rate of taxation increases (as the rate increases to 100% the price approaches zero as George intended[1]), so it becomes more difficult to ascertain what its "real value" is, even before the more complex separation of "improved land value" and "unimproved land value". Georgists counter that although the accuracy of land assessments vary by method and the level of effort land values are currently assessed around the world where property/council taxes exist and can be improved with the assistance of modern GIS maps[2][3][4] though these are predominantly market based measures and even then prove difficult[5]

It has been recognized since Adam Smith and David Ricardo that a tax on land value itself cannot be passed on to tenants, but instead would be paid for by the owners of the land:

A tax upon ground-rents would not raise the rents of houses. It would fall altogether upon the owner of the ground-rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground.
Adam Smith, Wealth of Nations
A tax on rent would affect rent only; it would fall wholly on landlords, and could not be shifted to any class of consumers. The landlord could not raise his rent, because he would leave unaltered the difference between the produce obtained from the least productive land in cultivation, and that obtained from land of every quality.
—David Ricardo, On the Principles of Political Economy and Taxation

While some might wish to re-interpret the notion that all have an equal right to land in communistic terms, this would run rather antithetically to the firm free-market beliefs of Henry George himself. This confusion has existed since George's time, and he carried on public disagreements with Karl Marx.

Influence

Georgism has influenced a number of individuals, among whom included Chinese leader Sun Yat-sen and American industrialist Henry Ford.[6] He has also been cited in observations by many winners of the Nobel Prize in Economics, such as Milton Friedman, James Tobin, Joseph Stiglitz, William Vickrey, James Buchanan, and others.[7] There have also been a few political movements and parties in the last century aiming to implement a single-tax regime, and there still are a few crazy people who live in Georgist communities.[8]

Georgism proved to be an entry point for some into either Progressivism or Libertarianism, as many founders of both movements got their start as political activists as Georgists. George's views on land were egalitarian and appealed to those with a desire to alleviate the squalor of the working classes during the early Industrial Revolution, while his views on other matters were laissez-faire and free market oriented, on the assumption that his land tax was all government needed to fund beneficial expenditures. Depending on which of George's views one took the ball and ran with, Georgism could be an entry point in either direction. Examples include John Dewey, one of the founders of the Progressive movement; and on the other hand, Albert Jay Nock, Frank Chodorov, and others associated with The Freeman magazine of the 1920s, which began as a Georgist publication but with some writers who were also libertarian. [9]

Modern awareness and consideration of Georgism are rare[10]. It is not usually seen as practical, since it is technically and politically challenging to implement[11][12][13]. Concerns over balancing revenue raised with political feasibility is a problem due to [10][13] widespread public skepticism of new taxes[14], so even if optimal, Georgism is not considered to be practical by most economists and policymakers. However, there are still some determined economists and activists searching for a silver-bullet economic policy who turn to Henry George.[15]

While most economists dismissed George in his time, land value taxation is seeing a revival in economics and the blogosphere.[16][17][18][19][20][21]

Footnotes

  1. Charles Hooper. The Concise Encyclopedia of Economics: Henry George
  2. Ted Gwartney. Estimating Land Values
  3. German, Jerome C., Dennis Robinson and Joan Youngman. Land Lines: July 2000, Volume 12, Number 4 Traditional Methods and New Approaches to Land Valuation
  4. One Hundred Years of Land Values; Gabriel Ahlfeldt; Lincoln Institute for Land Policy
  5. Transport for London Property value study – Assessing the change in values attributable to the Jubilee Line Extension, paragraph 2.2.3
  6. Famous Georgists
  7. Quotable Nobels
  8. http://www.georgiststudies.org/george100years.html
  9. Robert Clancy The Freeman and We Georgists, 1957
  10. 10.0 10.1 N. Gregory Mankiw. Principles of Microeconomics 2008, page 169
  11. Murray Rothbard. The Single Tax: Economic and Moral Implications and A Reply to Georgist Criticisms
  12. David J. Heinrich. Murray Rothbard and Henry George
  13. 13.0 13.1 Dick Netzer. Land Value Taxation: Could It Work Today? March 1998
  14. Levying the Land The Economist
  15. It's a Lonely Quest for Land-Tax Fans, But, by George, They Press On, Wall Street Journal
  16. Phillip J. Bryson. The Economics of Henry George : History's Rehabilitation of America's Greatest Early Economist, 2011
  17. Ashok Rao. How Much Money Could a Land Value Tax Raise?. Slate. 2013 October 17.
  18. Noah Smith. This 100-year-old idea could end San Francisco’s class war. Quartz. 2014 January 23.
  19. Matthew Yglesias. Property Taxes Are A Barbarous Relic: Tax The Value of Land Instead. Slate. 2012 June 14.
  20. Jesse Myerson. End the 1 percent’s free ride: Taxing land would solve America’s biggest problems. Salon. 2013 November 22.
  21. Jesse Myerson. Five Economic Reforms Millennials Should Be Fighting For. Rolling Stone. 2014 January 3.
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