“Behind every radical movement you will find Single Taxers. Woodrow Wilson is surrounded by them.”
– Walter Burley Griffin, Henry George Commemoration Dinner Address, Melbourne, 18 September 1915
An unparalleled amount of social reform was achieved during the US Progressive Era, when both Republican (Teddy Roosevelt and William Taft) and Democrat presidents (Woodrow Wilson) featured. From 1909 to 1921 they addressed the corruption, excesses and wrongs of the day. Of course, they were influenced by longer-standing movements and their leaders from about 1890 to 1930 in addressing these issues which included poverty, corruption, monopoly, fair competition and women’s suffrage measures.
But the world has retrogressed again into corruption and inequality, the surest indicator of which is the well-documented phenomenon of a vastly-widening gap between what the Occupy movement calls the “1%” and the rest of us. Political parties have no real answers and have become a complete shemozzle as they continue to accept funds from self-interested corporate donors at our expense.
Although the Ayn Randian “trickle down” economics supported by the US and UK leadership of Ronald Reagan and Margaret Thatcher has proven itself to be a fraud perpetrated on all but the super wealthy (real incomes having started to decline in 1972 a little before their time), attempted reform movements such as Occupy Wall Street have been confronted by a citadel-like defence from the status quo.
This is mainly because reform today lacks the economic focus that characterised and underpinned the reforms of the Progressive Era. If you don’t get your economics right, then all other reforms are destined to fail. Yes, the wealthy are certainly getting wealthier at the expense of the poor and middle class, but does Tomas Piketty’s call for higher taxes on capital constitute a valid response, for example? No, definitely not. Piketty’s conclusion is not as compelling as his extensive data.
The Progressive Era was informed by Henry George’s reformative economics [see Mason Gaffney's evidence] which explained that private incomes from publicly-generated land rents–in the broader sense of rents from all natural resources–are unearned and must be distinguished from the earned incomes of wages and capital. Therefore, Piketty’s solution is a scatter-gun approach that leaves much to be desired and is likely to damage the productive economy. Other major reforms, such as the movement for action on climate change, which tends to disregard our concupiscence to destructive rent-seeking, are also diminished by their lack of focus on fundamental taxation and economic reform.
If we want to experience a new progressive era of reform, it needs to concentrate upon those unearned incomes from land and natural resources which the wealthy have proven to be so proficient at keeping away from the public purse – as witnessed by the Australian mining industry’s successful $22 million scare campaign against the resource super profit tax.
Ironically, it may be our aspiration and proclivity to become like the 1% that holds us back from progressive reform. Australia’s current obsession with residential “investment”, which is worrying the Governor of the Reserve Bank of Australia at the moment and is likely to end badly, tends to support this proposition.
The outlook is bleak but improving. As property-bubble-weakened world economies continue to wrestle for answers, there has emerged a significant re-awakening to the transformative ideas of Henry George: even Australia’s Henry Tax Review is alert to them.
Wandering through Hardware Lane in Melbourne some two years after completing my real estate valuation qualification in 1973 at the Royal Melbourne Institute of Technology (RMIT), I noticed a commentary about the Victorian Land Tax in the window of a quaint little shop. “What would this outfit know about land taxes?” I thought. I went into the little bookshop and took away a handful of pamphlets. They obviously caught my imagination because almost immediately I revisited the shop, the office of The Henry George League, to purchase a copy of Henry George’s Progress and Poverty.
I couldn’t put the book down. I started reading it through what remained of my lunchtime, on the way back home that evening on the train to Glen Waverley, and through most of the night. I finished reading it in my next lunchtime, the day after I’d bought it. I was thunderstruck at the ease of George’s logic and language. Moreover, I had heard nothing of these ideas during my valuation course at RMIT, although valuers concerned with property rating certainly needed to understand its contents.
Before reading Henry George, I had not even begun to contemplate that land price, too, was simply the private capitalisation of a site’s publicly-created net land rent—just as I had been taught in my property valuation course was the way to assess the value of improved commercial and industrial properties. I couldn’t comprehend why what constituted land price hadn’t been touched upon or explained in my valuation course.
Maybe Henry George was considered to be some sort of a threat to the status quo?
Similarly, most real estate valuers I spoke to had never heard of Henry George. Those few older valuers who had heard of him, mainly local government valuers, tended to speak of him dismissively. When asked to elaborate, it became clear that their understanding of was quite superficial, and that they’d been poorly advised about what George actually said. I found no valuer who had read him thoroughly until, about eight years later when working in the Australian Taxation Office as a real estate valuer, I was to meet Noel Wigmore, a valuer, a strong supporter of the ideas of Henry George, and the former head of the property division of the Victorian Railways. I had earlier worked in the claims department of the Railways in the same building, and for a few years contemporaneously, with Noel.
Not inspired by what I had perceived to be a lack of activity in the little shop in Hardware Lane, I didn’t join the Henry George League, but I did take the opportunity over the next few years to voraciously read all of Henry George’s works, and all the books by Georgist authors I could get my hands on.
Then, in January 1983, the flawed logic of an article Merits of Rating Systems in my professional magazine, The Valuer, raised my hackles. I rang the little shop in Hardware Lane. I believe it was the Geoff Forster, editor of the CSIRO magazine and intrepid editor of PROGRESS, the Henry George League’s journal, who answered my telephone call. No, he was unaware of the article, but he could give me the home telephone number of a man who may have seen it. That man was Allan Hutchinson, 1943 founder and still (in 1983) honorary director of the Land Values Research Group [LVRG]. Hutchinson advised me, yes, he had read the item in The Valuer and had intended to reply to it, but why didn’t I do so, instead? So I did.
It was not a particularly good letter, but I had been stirred into action by the faulty logic I had discovered was typically directed against the arguments of Henry George. At Allan Hutchinson’s invitation, I chose to join the Henry George League shortly after the publication of my letter in The Valuer in April 1983. If you can’t lick ’em, join ’em, I thought.
Subsequently, I had many enjoyable evenings with Allan and Mary Hutchinson eliciting supplementary Georgist history from them. I joined Allan’s Land Values Research Group (LVRG – the research body for the Henry George League) and the General Council for Rating Reform (GCRR) attending “working nights” in the company of a few others, analysing statistical data on building permits against each (then) rating regime, site value (SV) or net annual value (NAV). Without exception, SV always performed better, yet the Capital Improved Value (CIV) system–on which the whole of Victoria now operates–is closely related to the flawed NAV system. [!]
Following the death of the esteemed Allan Hutchinson on Sunday 24 April 1988, I assumed the honorary directorship of the LVRG. To later work for three years with the late Tony O’Brien in assessing Australia’ land rent was a rare privilege. My own particular specialty was to collect and collate data on real estate sales turnover from the Australian States and territories from 1987 back to 1972, because at that time neither the Australian Bureau of Statistics, the Reserve Bank of Australia nor federal Treasury bothered to do so. When aggregated against GDP, the graphical compilation I had nominated as the Barometer of the Economy appeared to accord strongly with Henry George’s theory.
Dr Gavin Putland subsequently became director of the LVRG in 2008 and, with his vast acumen, has rapidly progressed its work, in both a paid and (now) unpaid capacity. The Henry George League has since become Prosper Australia and that body has been kicking goals in educating the public to the virtues of publicly capturing economic rents rather than allowing them to be privatised.
Most world economies have teetered and fallen over the brink because revenue regimes have been fining productivity whilst they encourage rent-seeking. Therefore, it seems we have two options, namely, to continue taxing people and businesses for being productive, thereby keeping humanity in unwitting serfdom to the rentier class, or, to pay natural resource rents, instead of arbitrary taxes, into the public coffers, if we are to apply the brakes on monopoly, speculation, and repetitive financial devastation.
To me, the case to free people, the planet and economies is unassailable, and exciting challenges lie ahead for making the necessary switch to natural resource-based revenues.
…. BECAUSE THEY CAN’T FLEE TO OVERSEAS TAX HAVENS