We are now in a position to address the specific influence of Henry George on the thought of Monsignor Ryan. This is not difficult, despite the fact that the first part of Ryan’s Distributive Justice focuses on allegedly refuting George’s theories of the natural right to property, particularly the legitimacy of title to land.
It thereby appeared that Ryan was repudiating his earlier enthusiasm for georgist (or “georgeite” as he termed it) theory and the “single tax.” The “single tax” is based on the presumed right of the State to take the “fruits of ownership” at will as an exercise of property: all income or increases in value from land. This would make land ownership pointless, and vest effective (if not legal) title in the State.
The problem is that George’s analysis and rejection of the natural right to own land was only to justify the “single tax” proposal. The question of title (dominion, proprietas) was never the main issue.
Going by George’s firmly stated conviction, title was irrelevant. As far as George was concerned, people could retain nominal title to land as long as the State made ownership meaningless by taking away control (usufruct) through confiscatory taxation for social purposes.
The usufruct, the fruits of ownership, that is, control and all income and increases in value attributable to land, would belong to the State. This would make the State the real owner. As George put it, “In this way the State may become the universal landlord without calling herself so.” [Emphasis added.] (Henry George, Progress and Poverty. New York: The Schalkenbach Foundation, 1992, 406.)
By rejecting George’s analysis of title to land, Ryan set up a straw man and demolished it. He left intact the fundamental guiding principle of the georgist “single tax,” support for which was the trigger for McGlynn’s excommunication for disobedience and insulting behavior. (McGlynn was not excommunicated for heresy, but because he refused to go to Rome to present his views when ordered.)
Ryan’s whole theory was based on the State’s alleged right to exercise property in landed capital (effective title; dominion or proprietas) by controlling the fruits of ownership (exercise or use; usufruct), draining and exhausting a man’s means by excessive taxation. (Cf. Rerum Novarum, § 47.) Consequently, the balance of Distributive Justice, while it argued persuasively for the right to private property, did so from a perspective that changed what “private property,” even the whole of the natural law, means.
This is because, as Church authorities realized in the case of McGlynn, it is the “single tax” itself, not the question of title, that is the chief problem with georgism. George considered title an irrelevant legal technicality as long as effective title is vested in the State through the State’s control of all land by taking all profits from land as the “single tax.”
That being the case, taxes are not a grant from the people to the State to defray legitimate expenses of government. They are, instead, an exercise of an ultimate property right by the State, to be used for any social purpose, i.e., to provide for individual goods directly, instead of indirectly by maintaining the common good. As a 1942 article in Fortune magazine described this view of taxation that became official public policy with the New Deal,
. . . The purpose of the federal tax system is not to raise enough money to balance all federal outlays. Although a balanced budget may at times be desirable, we never have to have one. . . . Once . . . freed from the obsolete concept of the balanced budget, the larger uses of federal taxes can be creatively explored. (“The Domestic Economy,” Fortune, December 1942, 16, quoted in Harold G. Moulton, The New Philosophy of Public Debt, Washington, DC: The Brookings Institution, 1943, 10.)
As Alvin H. Hansen, “the American Keynes,” explained, these “creative purposes” are to redistribute income and to prevent inflation during periods of “full employment.” (Alvin H. Hansen, Fiscal Policy and Business Cycles. New York: W. W. Norton & Company, 1941, 175, quoted by Moulton, The New Philosophy of Public Debt, op. cit., 72.) That being the case, the difference between George’s “single tax” that takes 100% of the income or increase attributable to land for social purposes, and Ryan’s claim that, “To use the taxing power for a social purpose is neither unusual nor unreasonable” (Ryan, Distributive Justice, Third Edition. New York: The Macmillan Company, 1942, 69) is only a difference in degree, not in kind.
Such a philosophy of taxation also puts every individual under direct control of the State. Everyone becomes a dependent on the State for whatever he or she receives in wages and welfare. What is received is subject to confiscation through the tax system if what someone has is deemed too much for the purposes of society. Ryan confirmed his substantial agreement with the fundamental principles of georgist socialism when he stated, “If [the single tax] were fairly adjusted and efficiently administered it could not prove harmful to the community.” (Ibid.)
The “single tax” abolishes private property, and is specifically designed to do so. By abolishing private property, individual rights become nothing. Collective benefits in aggregate, at least in material terms, become everything. As for the effect on the individual owner, Ryan considered that, taken on principle (and confusing title with use), the “single tax” is “a fair and valid limitation on the right of ownership.” (Ryan, Distributive Justice, op. cit., 73.)
According to Ryan, the only people who would be treated unjustly would be those who would lose part of the value they originally paid for the land as it decreased in value as a result of the single tax. As Ryan reasoned, the “single tax” that would utterly destroy private property is not unjust per se. (Ibid., 73-75.) As he concluded,
“To take all future increases in the value of land would be morally lawful if owners were compensated for positive losses of interest and principal. To take a small part of the increase and to transfer very gradually the taxes on improvements and on personal property to land would be likewise free from moral censure. The same judgment may be pronounced upon moderate supertaxes on large holdings of exceptionally valuable land and on certain agricultural land not cultivated by the owners.” (Ibid., 81.)
Ryan then applied this same reasoning to “excess” profits from the ownership of all forms of capital. (Ibid., 223-232.)
The problem in natural law with respect to Ryan’s analysis is that taxation for social purposes (such as redistribution) in any amount is specifically intended to “drain” and “exhaust” private means (Rerum Novarum, § 47) to achieve a presumably more equitable distribution of wealth. As we have already seen, this can only be justified as an expedient in an emergency, not as the usual way of running society (ibid., § 22).
The fact is that taxation for “social purposes” accomplishes its ends solely by taking from those with “too much” for redistribution to those who are judged by the authorities as not having enough. This is prohibited under the natural law. The principle of taxing for social purposes as a usual thing instead of as an expedient in an emergency is itself the problem, not how much is taxed or how the tax is administered. (Quadragesimo Anno, op. cit., § 49.)
The exception is permitted by default as an expedient under distributive justice in extreme cases. This means that the expedient is limited to distributions made to citizens from the government. It does not include exchanges between individuals and business enterprises that come under commutative justice. There are different rules that apply in the latter cases.
In the case of a distribution made under distributive justice to deal with extreme need, however, the goal is not a more equitable distribution of wealth or to control inflation. The purpose is to keep people alive and in reasonable health when no other recourse is available.
Ryan’s acceptance of the substance of George’s single tax, while altering the form and specific application of how private property is abolished, accedes to the socialist principle that taxes are an exercise of the State’s ultimate property right. The single tax concept repudiates the theory that taxes are a grant from the citizens, and unjust without their consent. Ryan’s redefinition of distributive justice effectively countered Locke’s theory of consent of the governed, and implemented totalitarian philosopher Thomas Hobbes’s concept from Leviathan that taxation is the exercise of an ultimate property right by the State, i.e., socialism.