Ending Redlining Through a Community-Centered Reform of the Community Reinvestment Act

By Josh Silver

Reviewed by Edward J. Dodson, M.L.A. / January 2026

Josh Silver has pulled together a comprehensive history and analysis of the decades-long effort by community organizers, elected officials and regulators to create a level playing field governing access to credit. As he documents, when this access is denied, entire communities suffer disinvestment, and disinvestment results in widespread, generational unemployment, poverty and all of the social ills associated with these conditions.

This book would serve well as the textbook for a course on the economics of credit access taught to those who are new to positions in banking, government or community organizations with responsibilities and commitments to fair lending and the economic revitalization of communities. The author documents what amounts to either a two step forward, one step backward or a one step forward, two step backward implementation of provisions of the Community Reinvestment Act.

The social and economic conditions existing in many parts of the United States continue to suggest the need for fundamental systemic reforms. This, the Community Reinvestment Act is not. Such legislation is, at best, mitigation of underlying forces that create a society of haves and have nots. Josh Silver’s final assessment is revealing:

“The genius of CRA is that on the surface its requirement is simple: banks must serve all communities, including and especially the redlined ones. Yet behind the surface simplicity is a profound quest for repair, transparency, and empowerment of disenfranchised communities. For our restorative quest to succeed, communities must be invited to participate in reinvestment initiatives and engaged with respect and humility.”

There can be no question that racism and ethnic prejudice have characterized life in the United States from its very origins as a colonial outpost of the European nations that competed for the continent’s land and natural resources, driving away and decimating the tribal nations they encountered. The Community Reinvestment Act is merely one of the more recent measures acknowledging the extent to which the laws of the land have been crafted to secure and defend privilege for some at the expense of many others. The challenge for those who have fought and continue to fight for just law, justly enforced, is coming to a full understanding of the forms privilege takes and how it can be eliminated.

As Josh Silver reminds us, many communities were “redlined” as high risk because property values and property conditions were declining. Most properties in affected communities were already quite old and in need of costly rehabilitation, systems replacement, or demolition followed by new construction. Given the falling property values in these communities, traditional underwriting standards for the approval of loans for property rehabilitation ran into the problem that this spending would not result in a dollar-for-dollar increase in the potential sales value of the property. This meant that stabilizing the physical character of these neighborhoods would, at least for some period of time, require subsidies of one sort or another.

The irony is that the success of even modest public investment in these communities attracted urban pioneers and eventually higher income households, particularly if the existing housing stock had once been occupied by higher income households of a prior generation and had subsequently been acquired by absentee owners, broken up into small rental units and milked for cash flow and depreciation. When gentrification finally arrived its first victims were lower-income renters.

What the Community Reinvestment Act needs to be effective, in my view, are changes in other laws and public policies that would provide financial incentives to owners of property in every community to bring whatever property they own – particularly vacant land — to its highest, best use or sell to someone who will. There is one policy proven to generate this outcome when adopted. This is the shifting of property taxation off of buildings and onto the value of locations.

Briefly, here is the economics behind this insight.

Every parcel or land, every location, has some potential annual rental value. This value is determined by the level of demand, and the level of demand is determined by the quality of public goods and services brought to the location. Thus, whatever is a location’s rental value, that value is publicly-created and should be publicly collected as a charge for benefits received. Obviously, in a neighborhood where public goods and services are not particularly good, location values will be low. However, as community residents organize to pressure public officials to improve services, land values will begin to increase. Absent regular reassessment of the value of land to reflect these increases, accompanied by an increase in the rate of taxation applied to the current land values, the community becomes an attractive target for speculators. Speculators are those who have no intention of undertaking development. They acquire locations and wait, wait for land values to climb even higher and cash out, often with payment coming from public sector grants and low-interest loans to community development organizations.

Economics explains that something quite unique occurs as the dollar amount of taxation charged to owners of land increases. The potential selling price of land will begin to fall. This will occur because the difference between the tax payment and the potential annual rental value of locations (i.e., the net imputed economic rent) becomes less and less. The potential selling price of a location is essentially a capitalization of the net imputed economic rent. When the full potential economic rent is publicly captured, there is nothing left to be capitalized.

I anticipate that Josh Silver might ask how such a tax shift would affect those households living on a low, fixed income. Initially, as the taxation of buildings is lowered, the tax shift would result in a reduction of total tax payment. However, as vacant and underutilized land is developed, as population increases, and as new businesses are established, the value of land will increase. To prevent the wholesale displacement of lower income homeowners, the fairest solution is to allow owners to apply to have their annual property tax payment capped based on an affordability calculation, the unpaid but owed balance accruing as a lien on the property to be paid to the community at time of sale or transfer of ownership via inheritance.

What I offered here is something of an addendum to Josh Silver’s analysis. What I have proposed is a specific change in taxation that will draw market forces away from speculation in favor of development. Bank compliance with the objectives of the Community Reinvestment Act will be stimulated by dramatically increased opportunities for profitable and socially-responsible investments.

Edward J. Dodson is retired from a career in financial services. He managed the residential mortgage loan program for a mid-size commercial bank in Philadelphia. Then, in 1985 he joined Fannie Mae, where held several management and analyst positions until retiring in 2005. Since the early 1980s he has taught political economy and history at the Henry
George School of Social Science.

A letter of mine published in THE AGE today, in response to another yesterday from Bernadette George of Mildura.

Unfortunately, land prices have first claim on the results of progress, so the returns to labour and capital continue to suffer.

Our tax regimes need to offer a solution: i.e. un-tax labour and capital, and tax land rents (ergo, land prices) away instead. With increasing prosperity, people would then be more inclined to live in the regions where rents are cheaper out of the major cities.

ANOTHER EXCELLENT DISCUSSION

An Essay on the Right of Property in Land, with Respect to its Foundation in the Law of Nature, its Present Establishment by the Municipal Laws of Europe, and the Regulations by which it might be Rendered More Beneficial to the Lower Ranks of Mankind.

by William Ogilvie of Pittensear

Professor of Humanity, and Lecturer on Political and Natural History, Antiquities, Criticism, and Rhetoric, in the University and King’s College of Aberdeen, 1782

edited by Peter Gibb

The municipal laws of every country are not only observed as a rule of conduct, but by the bulk of the people they are regarded as the standard of right and of wrong, in all matters to which their regulations are extended.

In this prejudice, however natural to the crowd, and however salutary it may be deemed, men of enlarged and inquisitive minds are bound by no ties to acquiesce without enquiry.

Property is one of the principal objects of municipal law, and that to which its regulations are applied with greatest efficacy and precision. With respect to property in movables, great uniformity takes place in the laws of almost all nations; they differ only as being more or less extended to details, comprehending the diversity of commercial transactions; and this branch of jurisprudence may be said to have almost attained to its ultimate maturity and perfection.

But with respect to property in land, different principles have been adopted by different nations in different ages; and there is no reason why that system which now prevails in Europe, and which is derived from an age not deserving to be extolled for legislative wisdom, or regard to the equal rights of men, should be supposed to excel any system that has taken place elsewhere, or to be in itself already advanced beyond the capacity of improvement, or the need of reformation.

So let it be considered what regulations a colony of men settling in a small island, just sufficient to furnish them subsistence, by the aid of high cultivation, would probably establish in order to render the independent subsistence of each individual secure, and to prevent any one, or a few, from engrossing the territory, or acquiring a greater share than might be consistent with the public good? Just such regulations respecting property in land, it would be in the interest of every state to establish at any period of its history.

It is to a free and speculative disquisition, concerning the foundation of this right of property in land, and concerning those modifications, by which it may be rendered in the highest degree beneficial to all ranks of men, that the author of these pages wishes to call the attention of the learned, the ingenious, and the friends of mankind. )

 All Right of property is founded either in occupancy or labour. The earth having been given to mankind in common occupancy, each individual seems to have by nature a right to possess and cultivate an equal share. This right is little different from that which he has to the free use of the open air and running water; though not so indispensably requisite at short intervals for his actual existence, it is not less essential to the welfare and right state of his life through all its progressive stages.

 This right cannot be precluded by any possession of others and nor is it tacitly renounced by those who have had no opportunity of entering upon it. The opportunity of claiming this right ought to be reserved for every citizen. In many rude communities, this original right has been respected, and their public institutions accommodated to it; whenever conquests have taken place, this right has been commonly subverted and effaced; in the progress of commercial arts and refinements, it is suffered to fall into obscurity and neglect.

 Speculative reasoners have con-founded this equal right with that which is founded in labour, and ascertained by mutual law. The right of a landholder to an extensive estate must be founded chiefly in labour, and the progress of cultivation gives an ascendant to the right of labour over that of general occupancy. But the public good requires that both should be respected and combined together, and although such combination is difficult, and has rarely been established for any length of time, it is the proper object of Agrarian laws, and effectual means of establishing it may be devised. Almost all of Agrarian laws have proceeded on the plan of restricting that extent of landed property which an individual may acquire, and not the nature and the force of that right with which the landholder is invested (1). Thus endeavouring to establish an equality of fortune, they have been found impracticable, and, could they have been carried into execution, must have proved detrimental.

The value of an estate in land consists of three parts – the original, the improved, and the improvable value. That every man has a right to an equal share of the soil, in its original state, may be admitted to be a maxim of natural law. It is also a maxim of natural law, that everyone, by whose labour any portion of the soil has been rendered more fertile, has a right to the additional produce of that fertility, or to the value of it, and may transmit this right to other men. The original and the improvable value of a great estate still belong to the community, the improved alone to the landholder. (2)

If the original value of the soil be the joint property of the community, no scheme of taxation can be so equitable as a land-tax, by which alone the expenses of the state ought to be supported until the whole amount of that original value be exhausted; for the persons who have retained no portion of that public stock, but have suffered their shares to be deposited in the hands of the landholders, may be allowed to complain, if, before that fund is entirely applied to the public use, they are subjected to taxes, imposed on any other kind of property, or any articles of consumption.

 A just and exact valuation of landed property is the necessary basis of an equal land-tax. The original value is the proper subject of land-taxes: the improvable value may be separated from the improved, and ought to be still open to the claims of the community.

 How preposterous, then, is the system of that country which maintains a civil and military establishment, by taxes of large amount, without the assistance of any land-tax at all ! – In that example may be perceived the true spirit of legislation as exercised by landholders alone. Property in land is the fittest subject of taxation; and could it be made to support the whole expense of the public, great advantages would arise to all orders of men. What then, it may be said, would not in that case the proprietors of stock in trade, in manufacture and arts, escape taxation, that is, the proprietors of one-half the national income? They would indeed, be so exempted; and very justly, and very profitably for the State; for it accords with the best interests of the community, through successive generations, that active progressive industry should be exempted, if possible, from every public burden.

 All property ought to be the reward of industry; all industry ought to be secure of its full reward; the exorbitant right of the landholders subverts both these maxims of good policy. It is the indirect influence of this monopoly which makes a poors-rate necessary; requires unnatural severity in penal laws; renders sumptuary laws unpolitical, and the improvement of machinery for facilitating labour unpopular, and perhaps pernicious. The oppressed state of the cultivators, being universal, has been regarded by themselves and others as necessary and irremediable. A sound policy respecting property in land is perhaps the greatest improvement that can be made in human affairs.

 (And reformation in this important point is not to be despaired of; the establishment of property in land has changed, and may hereafter receive other innovations.)

The chief obstacle to rapid improvement of agriculture is plainly that monopoly of land which resides in the proprietors, and which the commercial system of the present age has taught them to exercise with artful strictness, almost everywhere. Hereafter, perhaps, some fortunate nation will give the example of setting agriculture free from its fetters. A new emulation will then arise among the nations hastening to acquire that higher vigour and prosperity, which the emancipation of the most useful of all arts cannot fail to produce.

 The actual state of Europe, with respect to property in land, is very different from what might be desired. That exclusive right to the improvable value of the soil which a few men, never in any country exceeding one hundredth part of the community, are permitted to engross, is a most oppressive privilege: by its operation, the happiness of mankind has been for ages more invaded and restrained, than by all the tyranny of kings, the imposture of priests, and the chicane of lawyers taken together, though these are supposed to be the greatest evils that afflict the societies of human kind.

 The rent which may be taken for land ought to be submitted to regulations not less than the interest of money. Whatever good reasons may be given for restraining money-holders from taking too high interest, may with still greater force be applied to restraining proprietors of land from an abuse of their right. By exacting exorbitant rents, they exercise a most pernicious usury, and deprive industry that is actually exerted of its due reward. By granting only short leases, they stifle and prevent the exertion of that industry which is ready at all times to spring up, were the cultivation of the soil laid open upon equitable terms. It is of more importance to the community, that regulations should be imposed on the proprietors of land, than on the proprietors of money; for land is the principal stock of every nation, the principal subject of industry, and the use of which is most necessary for the happiness and due employment of every individual.

 Nor is it less practicable to adapt regulations to the use of land than to the use of money, were the legislative body equally well inclined to impose salutary restrictions on both. The glaring abuses of the one might be as effectually prevented as those of the other; although the total exclusion of all manner of abuse from either is not to be looked for. But that class of men in whom the strength of every government resides, and the right of making or the power of influencing and controlling those who possess the right of making laws, have generally been borrowers of money and proprietors of land.

The monopoly of rude materials, indispensably requisite for carrying on any branch of industry, is far more pernicious than the monopoly of manufactured commodities ready for consumption. The monopoly possessed by landholders is of the first sort, and affects the prime material of the most essential industry.

 The monopoly possessed by land-holders enables them to deprive the peasants not only of the due reward of industry exercised on the soil, but also of that which they may have opportunity of exercising in any other way, and on any other subject; and hence arises the most obvious interest of the landholder, in promoting manufactures.

That nation is greatly deceived and misled which bestows any encouragement on manufactures for exportation, or for any purpose but the necessary internal supply, until the great manufactures of grain and pasturage are carried to their utmost extent – it can never be in the interest of the community; it may be in that of the landholders, who desire indeed to be considered as the nation itself, or at least as being representatives of the nation, and having the same interest with the whole body of the people.

 (When mention is made in political reasonings of the interest of any nation, and those circumstances, by which it is supposed to be injured or promoted, are canvassed, it is generally the interest of the landholders that is kept in view.)

 In fact, however, their interest is, in some most important respects, directly opposite to that of the great body of the community, over whom they exercise an ill-regulated jurisdiction, together with an oppressive monopoly in the commerce of land to be hired for cultivation.

Property in Land, as at present established, is a monopoly of the most pernicious kind. The interest of landholders is substituted for that of the community; it ought to be the same, but it is not. The landholders of a nation levy the most oppressive of all taxes; they receive the most unmerited of all pensions: if tithes are oppressive to industry, rents capable of being raised from time to time are much more so.

Regarding the whole wealth of the community, as belonging of right to themselves, landholders stand foremost in opposing the imposition of exorbitant taxes by the State, forgetting the exorbitancy of that taxation which they themselves impose on the cultivators of the soil, and which the sovereign may in justice, and in the way of retaliation ought to, regulate and restrain. They clamour aloud against pensions and sinecure places, bestowed by the sovereign, not adverting that their own large incomes are indeed pensions, and salaries of sinecure offices, which they derive from the partiality of municipal law in favour of that order of men by whom its regulations are virtually enacted.

There are districts in which the landholder’s rents have been doubled within fifty years, in consequence of a branch of manufacture being introduced and flourishing, without any improvement in the mode of agriculture, or any considerable increase of the produce of the soil. Here, therefore, the landlords are great gainers, but by what industry or attention have they earned their profits? How have they contributed to the progress of this manufacture, unless by forbearing to obstruct it? And yet from the necessity under which the manufacturing poor lived, of resorting to these landholders to purchase from them the use of houses and land, for the residence of their families, they have been enabled to tax their humble industry at a very high rate, and to rob them of perhaps more than one-half of its reward.

 Had the manufacturers of such districts possessed what every citizen seems entitled to have, a secure home of their own – had they enjoyed full property in their lands; would not then the reward of their industrious labour have remained entire in their own hands?

The encouragements granted to commerce and manufactures, and so universally extolled, seem merely schemes devised for employing the poor and finding subsistence for them, in that manner which may bring most immediate profit to the rich: and these methods are, if not deliberately, at least without inquiry, preferred to others, which might bring greater advantage to the body of the people directly, and ultimately even to the rich themselves.

 What is it that in England restrains the early marriages of the poor and industrious classes of men? Alas! not the Marriage Act but a system of institutions more difficult to be reformed; establishing in a few hands that monopoly of land by which the improvable as well as the improved value of the soil is engrossed. It is this which chiefly occasions the difficulty of their finding early and comfortable settlements in life, and so prevents the consent of parents from being given before the legal age. It is this difficulty which even after that age is passed still withholds the consent of parents, restrains the inclinations of the parties themselves, and keeps so great a number of the lower classes unmarried to their thirtieth or fortieth years, perhaps for their whole lives.

 What other reason can be given, than the influence of this monopoly, why in countries, for many ages not thinly inhabited, nor unacquainted with the arts of agriculture, so great a proportion of the soil should still remain barren, or at least far below that state of fertility, to which the judicious cultivation of independent occupiers could bring it?

While the cultivable lands remain locked up, as it were, under the present monopoly, any considerable increase of population, though it seems to add to the public strength, must have a pernicious influence on the relative interests of society, and the happiness of the greater number. By diminishing the wages of labour, it favours the rich, fosters their luxury, their vanity, their arrogance; while on the other hand, it deprives the poor of some share of their just reward and necessary subsistence.

It were unjust to censure the proprietors of land, however, for retaining and exercising, as they do, a right whose foundations have not been inquired into, and whose extent no one has ever yet controverted. It is the situation in which they find themselves placed that prompts their conduct; nor can they readily con-ceive either the injustice or the detriment which the public suffers, by permitting such rights to be exercised. On the other hand, the farmers and cultivators have no clear perception of the injustice and oppression which they suffer. They feel indeed, and they complain, but do not understand, or dare not consider steadily, from what cause their grievances take their rise. The oppressive rights of the one order, and the patient submission of the other, have grown up together insensibly from remote ages, in which the present state of human affairs could not have been foreseen.

The public good requires that every individual should be excited to employ his industry in increasing the public stock, or to exert his talents in the public service, by the certainty of a due reward. Whoever enjoys any revenue, not proportioned to such industry or exertion of his own, or of his ancestors, is a freebooter, who has found means to cheat or to rob the public, and more especially the indigent of that district in which he lives. But the hereditary revenue of a great landholder is wholly independent of his industry, and secure from every danger that does not threaten the whole State. It increases also without any effort of his, and in proportion to the industry of those who cultivate the soil. In respect of their industry, therefore, it is a taille or progressive tax of the most pernicious nature; and in respect of the landholder himself, it is a premium given to idleness, an inducement to refrain from any active useful employment, and to withhold his talents, whatever they are, from the service of his country. If the circumstances in which he finds himself placed stimulate to any exertion at all, it is that insidious vigilance by which he himself is debased, and his dependents at once corrupted and oppressed.

 It has been required of the magistrate that he should with the same assiduity apply rewards to virtue as punishment to vice. The part which he has to act in respect or these cases is very different. The natural sentiments of men are sufficient to repress smaller vices, and to encourage and reward great and striking virtues; but they are not vigorous enough to apply adequate punishment to great crimes, nor steady and uniform enough to secure due reward and regular encouragement to the common and ordinary virtues of human life.

Every man, and every order of men, have their peculiar commodity, which they bring to market for the service of the community, and for procuring the means of their own subsistence. It would be injustice and oppression, therefore, if any one order were to impose restrictions on any other, respecting the price they may demand for their peculiar commodity. This injustice, however, certain higher orders have attempted, though generally without success, to put in practice, on various occasions, against their inferiors – against hired servants, day labourers, journeymen, artists of various kinds – by prescribing limits to the wages they are allowed to ask or to receive.

These lower classes of citizens have only the labour of their hand for their commodity, and if any is more than another entitled to the privileges of a free and equal market, it is surely that which may be accounted more immediately the gift of nature to each.

The community has a right, no doubt, to restrain individuals from doing aught that may be pernicious or offensive: what right it can have to compel them to exert their industry for the public service, at a regulated price, may admit of question, excepting only those cases in which the safety of the state is brought into immediate and evident danger.

The indirect and remote influences of this monopoly are productive of many unnatural situations and many pernicious effects, which the skill of legislature is frequently employed in vain to redress. Were this monopoly anywhere removed, and the cultivation of the soil laid open upon reasonable terms, the lowest classes of men would not be destitute of wherewithal to maintain their decayed and infirm relations and neighbours. These charitable attentions, prompted by private affection, would be better discharged, than when they devolve on the public; and all that encourage-ment to idleness, that waste, and mismanagement, inseparable from poor rates, and other public institutions of this sort, would be spared.

Sumptuary laws have been frequently turned into ridicule, and not unjustly, as pretending to maintain an impracticable simplicity, and an unnecessary austerity of manners, among the great body of citizens; but they deserve a very different estimation, if considered as means of directing the public industry to those exertions which may be productive of the most extensive utility, and most valuable enjoyments to the community at large.
        

If those persons who spend their days in the manufactures of velvet and of lace could be induced to employ the same industry in raising grain, potatoes, and flax, would they not, by increasing the plenty of these necessary commodities, augment the real accommodation of a very numerous class of citizens? And would not the happiness thence arising more than compensate the scarcity of those frivolous refinements which may be required for the gratification of a few?

Why should it be necessary to restrain the industry which ministers to luxury ? – Because the industry which is productive of essential plenty, is restrained.

 In a country where the opportunities of exercising a natural employment, and finding an easy subsistence, were thus laid open to all, the temptations to theft and other violations of property would be very much diminished; nor could it be thought necessary to restrain such crimes by the unnatural severity of capital punishments.

In such a country no suspicion could arise, no surmise would be listened to, that the invention of machines for facilitating mechanical labour, could ever be pernicious to the common people, or adverse to the prosperity of the State.

Perhaps no government can claim to itself the praise of having attended with the same impartial care, to the interests of the lower, as of the higher classes of men. Those who are employed in cultivating the soil are placed below the regard of men in higher stations of public dignity and trust; nor are their sufferings and wrongs obtruded on every eye, like the misery of the begging poor. They themselves are not much accustomed to reflection; they submit in most countries to their hard fate, as to the laws of nature; nor are they skilled, when severer oppression has at any time awaked them to a sense of the injustice they suffer, in making known their feelings and their complaints to others. But if the intelligent, and the friends of mankind, will take some pains to inquire into the nature and extent of that oppression, under which the industrious groan, and the force of that exorbitant monopoly, from whence their grievances proceed; and if such men will employ the talents which nature has given them, in explaining these grievances, and the rigour of that monopoly, to the whole world, – Europe, enlightened Europe, will not be able to endure it much longer; and the subversion – nay, even the abatement – of this monopoly, with the abuses flowing from it, may well deserve to be accounted the best, and most valuable fruit of all her refinements and speculations.

 If it be indeed possible to accomplish any great improvement in the state of human affairs, and to unite the essential equality of a rude state, with the order, refinements, and accommodations of cultivated ages, such improvement is not so likely to be brought about by any means, as by a just and enlightened policy respecting property in land. It is a subject intimately connected with the proper occupation and the comfortable subsistence of men; that is, with their virtue and their happiness. It is of a real substantial nature, on which the regulations of law may be made to operate with efficacy, and even with precision.

 So powerful and salutary might the good effects of such an enlightened policy prove, so beneficial such a restoration of the claims of nature and the general birth rights of mankind, that it might alone suffice to renovate the strength of nations, exhausted by civil war, or by great and unsuccessful enterprises; and even in the most flourishing states, it might give rise to a new era of prosperity, surpassing all example, and all expectation that may reasonably be founded on any other means of improvement.

 If we consider only how far the present state of property in land even in the best governed nations of Europe, is removed from that more equitable and advantageous system, we may almost be led to despair that any great progress can be made towards so remote an improvement, however much it may be desired. – On the other hand, the actual system of landed property in Europe is greatly changed from what it has formerly been. It has varied its form, with the prevailing character of successive ages; it has been accommodated to the rude simplicity of the more ancient times, to the feudal chivalry of the middle centuries, and to the increasing industry and cultivation of later more tranquil periods. It may now therefore be expected to receive a new modification, from the genius and maxims of a commercial age, to which it is too manifest that the latest establishment of landed property is by no means adapted, and that from this incongruity the most pernicious and most flagrant oppressions arise.

 In the progress of the European system of landed property, the domestic, the feudal, and the commercial stages may be distinguished. In the first, the condition of the cultivator was secured from any great oppression, by the affectionate sympathy of the chief of his clan. In the second, it was still secured, and almost as effectually secured, by that need which his lord had of attachment, assistance, and support, in the frequent military enterprises and dangers in which he was engaged.

But in the commercial state there is no natural check which may establish the security of the cultivator; and his lord has hardly any obvious interest but to squeeze his industry as much as he can. It remains, therefore, for the legislatures of different countries to establish some control for protecting the essential interests of their common people. It is an object which deserves, and will reward, their care. In the dark and disorderly ages the oppression exercised over the cultivators could not be reduced to a system. Their landlords depended on their assistance and military services, and would not, therefore, hazard the diminution of their attachment. If at any time the landlord endeavoured to exact more than they were inclined to give, means of concealment and evasion were not wanting, by which his rapacity might be effectually eluded. But in the present times there is no reciprocal dependence, and all means of concealment and evasion are rendered by the order of our laws uncertain, or, indeed, vain.

 In those disorderly times, whatever oppression, or chance of oppression, the cultivators of the field were exposed to, they saw their landlord exposed to others, perhaps greater and more frequent. There was common to both an uncertainty in the possession of their just rights; and to compensate this, a chance of obtaining by address somewhat beyond these rights. In the present times, these common chances are removed by the protection of established government. The rights of the higher orders are rendered perfectly secure, while those of the cultivators are laid open to their oppressions.

That free discussion which every subject now receives gives reason to hope that truth and utility will always triumph, however slowly. In politics, in agriculture, in commerce, many errors have been rectified in theory, and even the practice in some (though not in an equal degree) reformed. And shall it be reckoned, then, that in this, the most important of all temporal concerns to the greatest number of mankind, the most pernicious errors will be suffered to remain still unrefuted, or if not unrefuted still unreformed? It is not permitted to the friends of mankind to despair of aught which may tend to improve the general happiness of their species, any more than it is consistent with a magnanimous and genuine patriotism ever to despair of the safety of our country.

The collective body of the people, if at any time their power shall predominate, ought above all things to insist on a just regulation of property in land. It belongs to the community to establish rules by which this general right may become definite; but not to recognise such a right at all, not to have established any rules by which its claims may be ascertained and complied with, ought to be accounted essentially unjust. Means may certainly be discovered by which this general right of the community in the property of the soil may be clearly and practically ascertained.

 Internal convulsions have arisen in many countries by which the decisive power of the State has been thrown, for a short while at least, into the hands of the collective body of the people. In these junctures they might have obtained a just re-establishment of their natural rights to independence of cultivation and to property in land, had they been themselves aware of their title to such rights, and had there been any leaders prepared to direct them in the mode of stating their just claim, and supporting it with necessary firmness and becoming moderation. Such was the revolution in 1688, at which time, surely, an article declarative of the natural right of property in land might have been inserted into the Bill of Rights, had the people at large been beforehand taught to understand that they were possessed of any such claim.

Under circumstances of public distress, even the higher and privileged ranks, awed into wisdom and humanity by the impending gloom, may be inclined to acquiesce in those regulations which tend to renovate the whole body of the State, though at the expense of diminishing in some degree the privileges and emoluments of their own order. They will consider that, unless the numbers, the industry, and the manly temper of the body of the people can be kept up, the fortune of the community must fall into continual and accelerated decline, and the privileges of every rank become insecure.

If, in the meantime , commerce is restrained and manufactures decline, let the cultivation of the soil be laid open, on reasonable terms and without delay, to the people thus deprived of their usual employment; such a resource would convert what they must account a misfortune into an opportunity of finding real and natural happiness.

What more effectual preparation can be made for the most vigorous defence of national liberty and independence, than to interest every individual citizen more immediately and directly in the welfare of his country, by giving him a share in the property of the soil, and training him to the use of arms for its defence. The former of these means of public security and defence is scarcely less requisite than the latter, the propriety of which is so generally understood.

 As for the beneficial effects of such a statute, the candid and intelligent are requested to estimate in their own thoughts what these might prove in the district with which they are most particularly acquainted, and to consider whether it would not very much improve the condition and the prospects of the day labourer, the hired servant and the working manufacturer, without imposing on the established farmer or the landlord any unjust inconvenience? Whether it would not lessen the number of the indigent and the idle? After having made this estimate, let them consider what might have been the present state of that district had such a progressive Agrarian law been established there one hundred or even fifty years ago.

Various objects have engaged the enthusiasm and excited the efforts of mankind in successive ages; schemes of conquest and settlement in one age; plans of civil and religious liberty in another; manufactures and commerce have now their turn; and perhaps in some not very distant age a just regulation of property in land may become the chief object of public spirited endeavours.

“ Sic poscere fata, et reor, et si
quid veri mens augurat, opto. ”

“Destiny is pointing us to it;
as the birds in the air forecast,
my own good reasoning tells me:
– this is where we are going. ” (Editor’s translation)

Editor’s Notes:

(1)        In Scotland today the same mistake is still being made!
 Under land monopoly, the “nature” of the landowner’s ‘right’ – actually a ‘privilege’ – is society’s permission to extract that rental payment which by right (birthright) is the community’s own: and the “force” of this ‘right’ is delivered by The Law of Rent and Depression of Wages (see Further Reading).
The value of any piece of land can indeed be divided into the three separate parts Ogilvie proposes, viz: – the original value which the land might have borne in its ‘natural state’, prior to all development; the improved value which it has received from the improvements and developments bestowed upon it by the proprietor [buildings, cultivation, etc.]; and the improvable value, which the land may still receive from [possible and permitted] future improvements and developments.
 However, more recent thought recognises that for the purposes of site valuation for public revenue, we need distinguish only between the value of the unimproved site (which is entirely created by the presence and economic activity of the community, and therefore belongs to it) and the value of the improvements (which being created by the occupier belongs to him).

(2)        Although Ogilvie wrote his Essay essentially as an agrarian-based proposal for change, the land and tax reform he sets out addresses and resolves the key urban as well as rural problems in Scotland today. After all, it is in our cities, in the presence of concentrated populations, that by far the highest land values are found; and the effects of the Community Ground Rent measure would be just as beneficial here as in the country.

~~~~~

Many people have become aware of the descent of the world into financial depression. There’s much social media discussion on the subject, and numerous reasons are given for the upcoming socioeconomic collapse. Those aware see the mounting evidence: ineffectual political leadership and inadequate political responses to the worsening situation are obvious. However, the vast majority overlooks the incredibly tight case argued by Henry George, as mentioned in the subtitle to his 1879 Progress and Poverty: An inquiry into the cause of industrial depressions and of increase of want with increase of wealth …. The Remedy.

The reason that we repeat economic recessions and depressions, of course, is because we continue to ignore George’s explanation of them: land prices, which would not exist were we to capture their rent publicly, instead of taxing our incomes and purchases, develop into financial bubbles which burst repetitively into financial chaos. They also explain inflation and decline in the value of the currency – much more accurately than sorry ‘CPI’; the consumer price index.

The popular argument is that we’re about to experience a major financial collapse because governments have spent far too much money. “Just look at the USA’s national debt of $38.5 trillion!” (No that’s a matter of unnecessary government securities, Ray Dalio, Peter Schiff, Jim Rogers, Jim Rickards, et al!)

Well, money is a part of the problem in two senses: It’s land prices into which too much money has been ‘invested’. It’s also the money spent into the economy by private banking, real estate, media and other vested interests to maintain the idea that boom-bust is “the natural business cycle“, to influence our politicians to this effect, and to continue to keep us in the dark.

Unfortunately, we continue to elect politicians beholden to this increasingly stupid financial mindset. May I suggest that land prices are the precise measure of our economic sickness and political corruption?

~~~~~

PROPERTY IN LAND EVERY ONE’S RIGHT

Proved in a LECTURE Read at the Philosophical Society in Newcastle, on the 8th of Nov, 1775

Thomas Spence

Th’invention all admired, and each, how he
To be the inventor miss’d; so easy it seem’d
Once found, which yet unfound most would have thought impossible.
PAR. LOST

MR PRESIDENT,

As it is my turn to lecture, I chose to give some thoughts on this important question, viz. Whether mankind, in society, reap all the advantages from their natural and equal rights of property in land, and liberty, which in that state they possibly might and ought to expect? And as I take you, Mr President, and the good company here to be sincere friends to truth, I am under no apprehensions of giving offence by defending her cause with freedom.

That property in land and liberty among men, in a state of nature, ought to be equal, few, one would fain hope, would be foolish enough to deny. Therefore, taking this to be granted, the country of any people, in a native state, is properly their common, in which each of them has an equal property, with free liberty to sustain himself and connections with the animals, fruits and other products thereof. Thus such a people reap jointly the whole advantages of their country, or neighbourhood, without having their right in so doing called in question by any, not even by the most selfish and corrupted. For upon what must they live, if not upon the productions of the country in which they reside? Surely, to deny them that right is, in effect, denying them a right to live. Well, methinks some are now ready to say, But is it lawful, reasonable and just, for this people to sell, or make a present, even of the whole of their country, or common, to whom they will, to be held by them and their heirs, even for ever?

To this I answer, If their posterity require no grosser materials to live and move upon than air, it would, to be sure, be very ill-natured, to dispute their power of parting with what of their own, their posterity would never have occasion for; but if their posterity cannot live but as grossly as they do, the same gross materials must be left them to live upon. For a right to deprive anything of the means of living, supposes a right to deprive it of life; and this right ancestors are not supposed to have over their posterity.

Hence it is plain that the land or earth, in any country or neighbourhood, with every thing in or on the same, or pertaining thereto, belongs at all times to the living inhabitants of the said country or neighbourhood in an equal manner. For, as said before, there is no living but on land and its productions, consequently, what we cannot live without we have the same property in, as in our lives.

Now society being properly nothing but a mutual agreement among the inhabitants of a country, to maintain the natural rights and privileges of one another against all opposers, whether foreign or domestic, would lead one to expect to find those rights and privileges, no further infringed upon, among men pretending to be in that state, than necessity absolutely required. I say again, it would lead one to think so. But I am afraid, whoever does will be mightily mistaken. However, as the truth here is of much importance to know, let it be fought out; in order to which, it may not be improper to trace the present method of holding land among men in society, from its original.

If we take a look back to the rise of the present nations, we shall see that the land, with all its appurtenances was claimed by a few, and divided among themselves, in as assured a manner, as if they had manufactured it, and it had been the work of their own hands, and by being unquestioned, or not called to an account for such usurpations and unjust claims, they fell into a habit of thinking, or, which is the same thing, to the rest of mankind, of acting as if the earth was made for or by them, and did not scruple to call it their own property, which they might dispose of without regard to any other living creature in the universe.

Accordingly they did so, and neither a man, more than any other creature, could claim a right to so much as a blade of grass, or a morsel of anything, though to save its life, without the permission of the proprietor; and not an inch of land, water, rock, or heath but was claimed by one or other of those lords; so that all things, men as well as other creatures, who lived, were obliged to owe their lives to some or other’s property, consequently they too, were claimed; and as properly as the wood, herbs, &c., that were nourished by the soil. And so we find, that whether they lived, multiplied, worked or fought, it was all for their respective lords; and they most graciously accepted of all as their due. For by granting the means of life, they granted the life itself, and consequently they thought they had a right to all the services and advantages that the life or death of the creatures they gave life to could yield.

Thus the title of Gods seems suitably enough applied to such great beings; nor is it to be wondered at that no services could be thought too great by poor, dependent, needy wretches to such mighty and all-sufficient lords, in whom they seemed to live and move and have their being. Thus were the first landholders usurpers and tyrants; and all who have since possessed their lands, have done so by right of inheritance, purchase, &c. from them, and the present proprietors, like their predecessors, are proud to own it; and like them, too, they exclude all others from the least pretence to their respective properties. And any one of them still can, by law oblige every living creature to remove off his property (which, to the great distress of mankind, is too oft put in execution); so, of consequence, were all the landholders to be of one mind, and determined to take their properties into their own hands, all the rest of mankind might go to heaven if they would, for there would be no place found for them here. Thus men may not live in any part of this world but by the permission of the pretender to the property thereof: which permission is for the most part paid extravagantly for, and they are still advancing the terms of permission, though many people are so straitened to pay the present demands, that it is believed in a short time, if they hold on, there will be few to grant the favour to. And those Land-makers, as we shall call them, justify all this by the practice of other manufacturers, who take all they can get for the products of their hands; and because that every one ought to live by his business as well as he can, and consequently so ought Land-makers. Now, having before supposed it both proved and allowed, that mankind have as equal and just a property in land as they have in liberty, air, or the light and heat of the sun, and having also considered upon what hard conditions they enjoy those their privileges, it seems plain they do not reap all the advantages from them, which they might or ought to expect.

But lest it should be said, that a system whereby they might reap more advantages consistent with the nature of society cannot be proposed, I will attempt to show the outlines of such a plan. Let it be supposed then, that the whole people in some country, after much reasoning, conclude, that each man has an equal property in the land in the neighbourhood where he resides. They therefore resolve, that if they live in society together, it shall only be with a view, that every one may reap all the benefits from their natural rights and privileges possible. Therefore, a day is appointed on which the inhabitants of each parish meet, in their respective parishes, to form themselves into corporations. So then each parish becomes a corporation, and all the men who are inhabitants become members. The land with all that appertains to it, is in every parish, made the property of the corporation with as ample power to let, repair, or alter all, or any part thereof, as a landlord enjoys over his lands, houses, &c. but the power of alienating the least morsel, in any manner, from the parish, either at this or any time hereafter, is denied. For it is solemnly agreed to, by the whole nation, that a parish that shall either sell, or give away, any part of its landed property, shall be looked upon with as much horror and detestation, and used by them as if they had sold all their children to be slaves, or massacred them with their own hands. Thus are there no more nor other landlords in the whole country than the parishes; and each of them is sovereign landlord of its own territories.

There you may behold the rent which the people have paid into the parish treasuries, employed by each parish in paying the government its share of the sum which the parliament at any time grants; in maintaining and relieving its own poor, and people out of work; in paying its clergymen, schoolmasters and officers their salaries; in building, repairing, and adorning its houses, bridges, and other structures; in making and maintaining convenient and delightful streets, highways, and passages both for foot and carriages; in making and maintaining canals and other conveniences for trade and navigation; in planting and taking in waste grounds; in providing and keeping up a magazine of ammunition, and all sorts of arms sufficient for all its inhabitants in case of danger from enemies; in premiums for the encouragement of agriculture, or anything else thought worthy of encouragement; and, in a word, in doing whatever the people think proper; and not, as formerly, to support and spread luxury, pride, and all manner of vice and corruption. Corruption has now no being or effect among them; for all affairs to be determined by voting either in a full meeting of a parish, its committees, or the house of parliament, are done by balloting. So that votings, or elections among them, occasion no animosities, for none need to let another know for which side he votes; all that can be done, therefore, in order to gain a majority of votes for anything, is to make it appear in the best light possible by speaking or writing.

Among them government does not meddle in every trifle, but on the contrary, allows to each parish the power of putting the laws in force in all cases, even to the inflicting of death; and does not interfere, but when they act manifestly to the prejudice of society, and the rights and liberties of mankind, as established in their glorious constitution and laws. For the judgment of a parish may be as much depended upon as that of a house of lords, because they have as little to fear from speaking or voting according to truth, as they.

A certain number of neighbouring parishes have each an equal vote in the election of a person to represent them in parliament; and each of them pays equally towards his maintenance. He is chosen thus: all the candidates are proposed in every parish on the same day, when the election by balloting immediately proceeds, and he who has the majority in most of the parishes, is acknowledged to be their representative.

A man by dwelling a whole year in any parish becomes a parishioner, or member of its corporation; and retains that privilege, till he lives a full year in some other, when he becomes a member in that parish, and immediately loses all his right to the former for ever, unless he choose to go back and recover it, by dwelling again a full year there. Thus none can be a member of two parishes at once; and yet a man is always member of one though he shift ever so oft.

Buildings, clergymen, etc. for the established religion of the country, are maintained by each parish out of its treasury; but dissenters, if they set up any other religion, must bear the expense of it themselves.

All the men in every parish, at times of their own choosing, repair together to a field for that purpose, with their officers, arms, banners, and all sorts of martial music, in order to learn or retain the complete art of war; there they become soldiers! Yet not to molest their neighbours unprovoked, but to be able to defend what none have a right to dispute, their title to the enjoyment of; and woe be to them who occasion them to do this! they would use them worse than highwaymen, or pirates, if they got them in their power.

There is no army kept in pay among them, in times of peace; as all have property alike to defend, they are alike ready to run to arms when their country is in danger; and when an army is to be sent abroad, it is soon raised, either by recruiting, or by casting lots in each parish for so many men.

Observe further: as each man has a vote in all the affairs of his parish, the land is let in very small farms, which makes employment for a greater number of hands; and makes more victualing of all kinds be raised.

There are no taxes of any kind paid among them, by native or foreigner, but the aforesaid rent, which every person pays to the parish, according to the quantity, quality, and conveniences of the land, housing, &c., which he occupies in it. The government, poor, roads, &c. &c. as said before, are all maintained, by the parishes with the rent; on which account all wares, manufactures, allowable trade, employments, or actions are entirely duty free. Freedom to anything whatever cannot there be bought; a thing is either entirely prohibited, as theft or murder; or entirely free to everyone without tax or price. And the rents are still not so high, notwithstanding all that is done with them, as they were formerly, for only the maintenance of a few haughty, unthankful landlords. For the government, which is greatest mouth, having neither excisemen, customhouse men, collectors, army, pensioners, bribery, nor such like ruination vermin to maintain, is soon satisfied, and, moreover there are no more persons employed in offices, either about the government or parishes, than are absolutely necessary ; and their salaries are but just sufficient to maintain them suitable to their offices. And as to the other charges, they are but trifles, and might be increased or diminished at pleasure.

But though the rents were obliged to be somewhat raised, what then? All other nations have a devouring landed interest to support besides those necessary expenses of the public; and they might be raised very high indeed before their burden would be as heavy as that of their neighbours. And it surely would be the same, for a person in any country to pay for instance five pounds taxes a year, at once upon one thing, as to do it little and little upon everything he gets. It would certainly save him a great deal of trouble and inconvenience, and government much expense.

And the final consequence of all this, all things that are allowed to be imported from abroad or that are the growth, or manufacture of the country, are as cheap as possible; and living is so easy, that he must be a rogue in his heart that cannot honestly live there.

But what makes this prospect yet more glorious is that after this empire is thus established, it will stand for ever. Force and corruption attempting its downfall shall equally be baffled, and all other nations, struck with wonder and admiration at its happiness and stability, shall follow the example; and thus the whole earth shall at last be happy and live like brethren.

____________________________

ps. The Newcastle Philosophical Society expelled Spence for publishing this piece. He said they did him “the honour” of doing so.

Having forecast the 1991/92 recession in an article “Getting it Right at Local Government” in my professional journal, The Valuer, in July 1987, I expanded on the data and reasoning in the August 1993 edition of the magazine in “Australia’s Rent-Seeking: Anatomy of a Depression“.

It’s not difficult to do so once escalating land prices are understood to be financially problematic for economies.

However, I must admit Australia didn’t experience the mid-18-year term recession that I had expected would occur in 1999-2000. The USA did, though, nominating it as the “Dot-com recession“.

Ah, the tangled web of economic rents, taxation, and unholy alliances that keep it all happening. Rent-seeking in the economic sense–i.e. profiting from control over scarce resources, like land, without adding value–translates into incredible political clout. Those who hoard such misbegotten wealth can lobby, donate, and shape policies to perpetuate the system, while the rest of us get caught on our earned incomes and on consumption taxes. It’s a setup that would have Adam Smith rolling in his grave.

There’s a real tension in Christian thought and practice. On one hand, the Bible is replete with passages decrying exploitation and calling for justice—i.e. Leviticus 25 on jubilee and debt forgiveness, or Jesus flipping tables in the temple over profiteering. However, many modern Christian leaders, especially in evangelical conservative circles, frame progressive economic reforms–like land value taxes, wealth redistribution, or universal basic income–as ‘socialist’, echoing Cold War-era fears of communism. The critique is not quite universal: there remains some tradition of Christian socialism and liberation theology (e.g., figures like Dorothy Day, or Martin Luther King Jr., who saw economic justice, in place of charity, as a critical core of religious faith).

Pope Francis was pretty vocal against unchecked capitalism, calling it “the dung of the devil”, which ruffles feathers in wealthier congregations. The cosy relationship has been a thing since Constantine made Christianity the state religion in the 4th century. Power does beget power. In the U.S. today, megachurches often align with pro-business policies, arguing that free markets reflect divine order or individual stewardship. Critics (including some theologians) call this out as cherry-picking scripture to justify inequality, while ignoring a preferential option for the poor. If we’re judging by the ethical frameworks of much Christian teaching, there’s hypocrisy afoot when leaders are able to prioritize donor-friendly stances over systemic reform. Not all religious figures are in on it—plenty advocate for ‘just economic reform’ without the ‘red-scare’ label. If we’re into truth telling, religion, like politics, has been well and truly co-opted by the powerful.

More transparency in political funding would greatly assist to break the unholy relationship.