Wednesday, December 3, 2014

Two Key Questions for the Georgists


Some people in the Just Third Way movement have been taking a significant number of questions (read “unsupported assertions”) from the “georgists,” as followers of the thought of Henry George are known.  Henry George was the noted author of one of the two most influential socialist works of the 19th century, apart from those of Karl Marx: Progress and Poverty (1879).  Edward Bellamy’s Looking Backward: 2000-1887 (1888), “One of the most remarkable books ever published in America” (Erich Fromm) was the other.

The georgists make a great many assertions, which we have attempted with no success at all to answer, at least to their satisfaction.  Whatever we say, the only response is a string of more assertions, all based on three fundamental principles found in georgism:

1. Only labor is productive (the labor theory of value)

2. The only way to finance new capital formation is by not consuming all that is produced and accumulating the surplus in the form of money savings.

3. Only the State has the right to own land.

We’re not going to respond to these principles yet again, at least directly.  It is obviously unproductive to keep attempting to dialog with people who don’t seem to hear what you’re saying, and just keep repeating the same things based on the assumption that the above principles are manifestly true . . . although they never seem to make the proofs manifest.

Instead, we need to look at two questions that the georgists have not been answering, possibly even avoiding answering.  Until and unless these two key questions are settled, in fact, it is useless to discuss anything else, even the fundamental principles given above, for these are the “principles behind the principles.”  If they cannot be answered adequately to the satisfaction of everyone in the debate, there truly is nothing to talk about.

1. The State’s Right To Be The “Universal Landlord”

Georgist theory is that only the people as a whole, not individual human beings, have the right to own land.  This is the heart of georgist theory, the whole point of Progress and Poverty.  Where, however, does the State or the community representing the people as a whole get its presumed right to be the “universal landlord”?

The collective, whether you call it the State, the community, or anything else, is an abstraction created by human beings, not by God.  It is a fundamental legal conception as well as common sense that no person, natural or artificial, can acquire greater rights than exist.  If individual, natural persons do not have the right to own land, then the human creation of the State cannot have the right to own land.

2. Two Sources of Absolute State Power

Assuming for the sake of the argument that the State has the right to be the universal landlord (which we do not for one moment concede), How is the potential abuse of State power to be checked?

If nothing can be produced without land, and there is only one landowner, that one landowner effectively has absolute power over everyone's subsistence.  This is the most dangerous thing in the world for the entity that also has a monopoly — absolute power — over the instruments of coercion.  As Lord Acton noted, "Power tends to corrupt.  Absolute power tends to corrupt absolutely.

Until and unless these two questions are answered, and answered adequately to mutual satisfaction, there can be no discussion.  People will otherwise simply be talking past one another.

#30#

18 comments:

Bill G said...

In another recent post you claimed "One of the more bizarre accusations people make against the Just Third Way and Capital Homesteading is that it’s socialist."

Similarly - you make the same claim against Henry George!

Michael D. Greaney said...

On the contrary. Sifting through your somewhat tortured syntax, the Just Third Way and Capital Homesteading posit widespread direct ownership of all forms of capital, including land — yes, I am fully aware that you do not consider land a form of capital, but have the decency to judge a system on its own principles and definitions, not on yours.

Thus, socialism being defined by Karl Marx in "The Communist Manifesto" as the abolition of private property in capital, the Just Third Way and Capital Homesteading are the antithesis of socialism.

Now, please take out your copy of "Progress and Poverty" by Henry George. Book VII of "Progress and Poverty", titled "Justice of the Remedy" (pp. 331 to 396 in the standard edition) explains in great deal why private property in land should be abolished. Book VIII gives George's opinion as to why private property in land is in practical terms a bad idea.

Abolishing private property in land is agrarian socialism, by definition. Whatever you or George or anyone else chooses to call it, Henry George was, by his own explicit statements, a socialist.

Bill G said...

AS a fan of catholic distributism myself & also a fan of mutualism - I am also for the wide & broad distribution of capital & land.

But the explicit mechanism for the Georgist remedy is to leave land titles in private hands.

Michael D. Greaney said...

George's program left nominal title in private hands. Ownership, however, consists of control and enjoyment of the fruits, i.e., the income, which in the case of land is called rent.

George clearly called for real ownership to be vested in the State on page 406 of "Progress and Poverty." Nominal title, as any lawyer should be able to tell you, is meaningless if it does not convey the right to the income. George's proposal left the form of private ownership, but removed the substance, thereby abolishing private property in land. As he clearly stated,

"What I, therefore, propose, as the simple yet sovereign remedy, which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crime, elevate morals, and taste, and intelligence, purify government and carry civilization to yet nobler heights, is — to appropriate rent by taxation.

"In this way the State may become the universal landlord without calling herself so, and without assuming a single new function. In form, the ownership of land would remain just as now. No owner of land need be dispossessed, and no restriction need be placed upon the amount of land any one could hold. For, rent being taken by the State in taxes, land, no matter in whose name it stood, or in what parcels it was held, would be really common property, and every member of the community would participate in the advantages of its ownership."

In other words, while the outward form of ownership would be private, the reality would be "common property," and thus effectively the abolition of private property in land.

The two questions remain: 1) How does the State (or whatever you choose to call it) acquire control and effective ownership of all land? Where does it get the right? 2) How is the State having absolute power over its own funding to be held in check by the citizens? If the State doesn't have to go to the citizens for money, the citizens have no control over the State. The single tax frees the State from the necessity of obtaining the consent of the governed?

Bill G said...

From P&P: Book VIII, Chapter 1

Section 7

"The complete recognition of common rights to land need in no way interfere with the complete recognition of individual right to improvements or produce. Two men may own a ship without sawing her in half. The ownership of a railway may be divided into a hundred thousand shares, and yet trains be run with as much system and precision as if there were but a single owner. In London, joint stock companies have been formed to hold and manage real estate. Everything could go on as now, and yet the common right to land be fully recognized by appropriating rent to the common benefit. There is a lot in the center of San Francisco to which the common rights of the people of that city are yet legally recognized. This lot is not cut up into infinitesimal pieces nor yet is it an unused waste. It is covered with fine buildings, the property of private individuals, that stand there in perfect security. The only difference between this lot and those around it, is that the rent of the one goes into the common school fund, the rent of the others into private pockets. What is to prevent the land of a whole country being held by the people of the country in this way?"

Bill G said...

Michael -

Do you believe there is a real difference between common ownership and collective ownership?

From your most recent comments it doesn't appear that you do not...

Because HG absolutely did and if you don't, then I am afraid our continued discussion won't be very fruitful.

Respectfully

Michael D. Greaney said...

Bill, you are dodging the issue. George's clear intent was the abolition of private property in land. That, by definition, is agrarian socialism.

The two questions remain: 1) Exactly where does the State get the right to own land when the human beings who make up the State presumably do not have that right? 2) How are citizens to control the State when they have no control over the purse strings?

Physiocrat said...

Regarding your comments and questions

1. Only labor is productive (the labor theory of value)

How can production take place other then through the action of labour?

2. The only way to finance new capital formation is by not consuming all that is produced and accumulating the surplus in the form of money savings.

I am not even sure this is a "Georgist" assertion, but capital is wealth not consumed but set aside for the production of more wealth. Thus a car used for business rather than pleasure is capital.

3. Only the State has the right to own land.

This has been the situation in England since Anglo-Saxon times. Has England been a tyrannical state as a consequence?

1. The State’s Right To Be The “Universal Landlord”

That is the reality. Land titles are derived from the state which protects and upholds them.

"Georgist theory is that only the people as a whole, not individual human beings, have the right to own land. This is the heart of georgist theory, the whole point of Progress and Poverty."

You have either mis-read, or not read P&P. George did not propose the abolition of land ownership. It is not part of his scheme. But legal experts such as Denman have pointed out that land ownership is a legal fiction - "a bundle of rights" was Denman's term.

' Where, however, does the State or the community representing the people as a whole get its presumed right to be the “universal landlord”? '
It comes from the assent of the people and their consent to the rule of the monarch.

"The collective, whether you call it the State, the community, or anything else, is an abstraction created by human beings, not by God. It is a fundamental legal conception as well as common sense that no person, natural or artificial, can acquire greater rights than exist. If individual, natural persons do not have the right to own land, then the human creation of the State cannot have the right to own land."

Yes, land ownership is a legal fiction. The monarch holds land on behalf of all the people. That was the Anglo-Saxon doctrine.

"2. Two Sources of Absolute State Power"
State power arises from the consent of the people. If the people are not watchful or are indisciplined, the state will gather up power to itself.

Lev said...

"In this way the State may become the universal landlord without calling herself so, and without assuming a single new function."

Pay attention to the second part of that quote. The government becomes holds the land in trust and it is distributed in usufruct according to market.

The question asked:

"1) Exactly where does the State get the right to own land when the human beings who make up the State presumably do not have that right?"

The state - or government if one prefers - acquires that right from recognition that there is no justified private ownership in land as it is not a product of one's labour. It's not the state's either for that matter. *Nobody* has legitimate claim it.

"2) How are citizens to control the State when they have no control over the purse strings?"

That simply doesn't follow. Citizens control the state through the usual means of democratic elections.

Mitchell Chanelis said...

You're barking up the wrong tree, Greaney; & you obviously have no clue as to the current state of Georgist affairs!NO advocate for the taxation of land values I know of, or have ever known, or have ever known about has even whispered that State ownership of land is desirable. The quotes about "ownership" from HG's writings are: 1) taken out of context; and, 2) refer ONLY to the recapture of community created land values for public purposes through taxation not confiscation.

What you totally miss is the vision of how such an economic transformation in REAL productivity & more efficient land use would effect society. If you GOT it, you'd realize that cheap land, because of high taxation, would undermine the entire foundation of the big, bad, all-powerful State you are so much against.

Leo said...

Who owns the sky?
If you can answer that, then you might apply that thinking to land.
If you decide that no-one can own the sky or the land, then the premise of "the state' having rights over it is false.
So too is the premise of private individuals having rights of ownership.
You might then begin to think of 'the commons'. That might assist you.

Michael D. Greaney said...

“UNIVERSAL. Having relation to the whole or an entirety; pertaining to all without exception; a term more extensive than ‘general,’ which latter may admit of exceptions.” (Black’s Law Dictionary.)

“LANDLORD. He of whom lands or tenements are holden. He who, being the owner of an estate in land, has leased it for a term of years, on a rent reserved, to another person, called the ‘tenant.’ . . . . ‘Landlord’ is ordinarily referred to as owner of tenement, to whom tenant pays rent, but is also defined as master or proprietor of inn or of lodging or boarding house.” (Black’s Law Dictionary.)

“Universal landlord” therefore signifies one who owns ALL the land. When the State is the “universal landlord,” no private person owns land. Private property in land is abolished.

“Property” signifies the right to own, and the bundle of rights that define how ownership is to be exercised.

Question one: Where does the State get the right to be the universal landlord?

Question two: How do the citizens control the State when the State raises money through taxation without their consent?

Bill G said...

Michael's comments:

"Where does the State get the right to be the universal landlord?"

You are making the premise that we (as Georgist) are talking about collective ownership where the state is the delegated authority of the whole.

That is NOT the case.

Common ownership is different than collective ownership. Common ownership is based on individual equal ownership.

In common ownership the role of the state is simply to insure that everyone's individual equal rights are upheld.

2nd question:

"How do the citizens control the State when the State raises money through taxation without their consent?"

The state doesn't "raise money through taxation"...

In an anarchistic society w/no central governance, economic rent attaches to all locations based on scarcity - this is a naturally occurring phenomena that happens regardless of whether "a state" (however you define it) is present or not.

The appearance of economic rent under scarcity conditions DEFINES the extent that individual's equal access opportunity rights are being violated.

The state's sole role is to enforce titles for exclusive use and make sure the economic rent is shared equally to uphold common rights (indivdual equal rights).

Michael D. Greaney said...

Dr. Norman G. Kurland and Ms. Dawn Brohawn have requested that I no longer attempt to respond to you. They think they can explain matters to you in a way you and other georgists can understand.

I will continue to post your comments, but will turn them over to others to answer as they see fit.

Physiocrat said...

Land cannot be "owned", either by an individual or by the state, in the sense that an individual can own his shirt or the state can own a warship. There are fundamental differences.

"Land ownership" is a legal fiction used to describe a bundle of rights over a defined parcel of land. These rights can only derive from a state having a monopoly of the use of force within its boundaries, thereby maintaining a condition of civil order. The state can then defend those rights through its system of law enforcement and through the courts. What is owned is a land title which has the guarantee provided by the state which issues it.

Physiocrat said...

Michael Greaney - there has been a fundamental problem with Catholic Social Teaching ever since Rerum Novarum, and it has had tragic effects, not least in depriving the Catholic workers' movements of effective weapons against Marxism and Socialism.

RN makes the same mistake as Marx! Land is regarded as a species of property, whereas it is sui generis, a gift of God.

RN is thought to have been written by Cardinal Manning, who was introduced to Henry George by the Catholic journalist and intellectual Wilfred Meynell. That would have been around 1885. I don't know what Manning made of George. RN is clearly in opposition but Manning's text may have been edited on that point. Manning of course is known for his support of the workers in the 1888 London dock strike.

QA of 1931 attempted to remedy the deficiencies by talking about duties of property owners. The Distributists never formulated a legislative and fiscal structure to bring about their aims. Homesteading is in itself no answer and how is it to be achieved anyway? There was an attempt at something of the kind in the 1930s, promoted by the Scottish bishops, if I recall.

The best thing to do is to follow Benedict's Caritas in Veritate which takes the whole subject back to square one by asserting that justice must come first.

Michael D. Greaney said...

The Catholic Church claims it has never changed a teaching. You claim otherwise.

Be that as it may, here is Cardinal Manning’s statement regarding his conversation with Henry George, as reported on page one of The Milwaukee Journal, Tuesday, December 14, 1886 (“Cardinal Manning on the Attitude of the Catholic Church”):

“The Catholic church is not opposed to the present labor movement or Mr. Henry George, unless they fall into socialism. There must be a very wide distinction made between the socialist and the workingman. I saw in a telegram some time ago that Mr. George had said the Catholic church had never confirmed the principle of property in land. This is not true. Exactly the reverse is the fact. The church has, from the beginning, taught the right of property in land.”

Michael D. Greaney said...

Comments have been received calumniating the Catholic Church, viz., to the effect that the Catholic Church has changed its infallible teachings and is therefore fallible in matters of faith and morals. I have deleted them without posting them.

I have not tolerated attacks on Islam, Judaism, or any other religion on this blog. I will not tolerate attacks on the Catholic Church.

This discussion is over. All future comments will be deleted.