Georgist encyclopedia topics

Browse Nearby Entries

Georgios Vazagkasvil...

Georgism

1 reference results for: Georgist

Wikipedia

"Georgist" redirects here. For the Romanian political group, see National Liberal Party-Brătianu.

Georgism, named after Henry George (1839-1897), a U.S. political economist, is a philosophy and economic ideology that holds that everyone owns what they create, but that everything found in nature, most importantly land, belongs equally to all humanity. Georgism is also referred to as geoism, by those who feel a more generic term is desirable. Georgism has also been synonymous with a single tax on land.

Main Tenets

Henry George is best known for his argument that the economic rent from land should be shared equally by society rather than falling into hands of private individuals. The clearest statement of this view is found in Progress and Poverty: "We must make land common property. Although this could be done by nationalising land and then leasing it out, George preferred taxing unimproved land value, in part because this would be less disruptive and controversial in a country where land titles have already been granted to individuals. With the revenue from this "single tax", the state could avoid having to tax any other type of income, wealth or transactions. Introducing a large land value tax would cause the value of land titles to fall significantly, but George was uncompromising on the idea of compensation for landowners, seeing the issue as a parallel to the earlier debate about compensating former slave owners.

Georgists also argue that all of the economic rent (ie, unearned income) collected from natural resources, the broadcast spectrum, mineral extraction, tradable emission permits, fishing quotas, airway corridor use, seignorage, space orbits, etc. and extraordinary returns from natural monopolies should go to the community rather than a private owner, and that no other taxes or burdensome economic regulations should be levied. In practice, the elimination of all other taxes implies a high land value tax, and a correspondingly sharp drop in the value of land ownership, although there would be no change in land rental prices (other than those caused by reduction of other taxes and regulations) for reasons first explained by Adam Smith in his book The Wealth of Nations.

Standard economic theory recognizes that a land value tax would be extremely efficient. Modern economists like the 1976 Nobel Memorial Prize winner Milton Friedman agree that Henry George's land tax is potentially beneficial because unlike other taxes, land taxes impose no excess burden on the economy, and thus stimulate more rapid economic growth. The idea of the earth as the common property of humanity has resonated with modern-day environmentalists, and some have endorsed the idea of ecological tax reform as a replacement for command and control regulation. This would include taxes on the use of land and natural resources, including substantial taxes or fees for pollution.

Synonyms and variants

Most early advocacy groups described themselves as Single Taxers, and George endorsed this as being an accurate description of the movement's main political goal - the replacement of all taxes with a land value tax. In the modern era, some groups inspired by Henry George place more of an emphasis on environmentalism, while others place more emphasis on his ideas on economics.

As the world became economically more complex, and the government grew to become a larger part of the economy, an abrupt change to a single land value tax became correspondingly more difficult, and so the term "Georgist" has come into vogue. This more general term encompasses the idea of incremental changes towards the elimination of unjust and economically destructive taxes on economic activity, by recovering the economic rent from land for the benefit of the entire society.

Some adherents are not entirely satisfied with the label Georgist. Henry George is now little known and the idea of a single land tax predates him. Some now use the term "Geoism", with the meaning of "Geo" deliberately ambiguous. "Earth Sharing", "Geoism", "Geonomics" and "Geolibertarianism" (see libertarianism) are also preferred by some Georgists; "Geoanarchism" is another one. These terms reflect a difference of emphasis, and sometimes real differences about how land rent should be spent (citizen's dividend or just replacing other taxes); but all agree that land rent should be recovered from its private recipients.

Influence

During its heyday, several communities were founded along Georgist principles. Two such still existing communities are Arden, Delaware, which was founded in 1900 by Frank Stephens and Will Price, and Fairhope, Alabama, which was founded in 1894 under the auspices of the Fairhope Single Tax Corporation

The German protectorate of Jiaozhou Bay (also known as Kiaochow) in China fully implemented Georgist policy. Its sole source of government revenue was the land value tax of six percent which it levied on its territory. The colony existed from 1898 until 1914.

In Britain in 1909, the Liberal Government of the day attempted to implement his ideas as part of the People's Budget. This caused a crisis which led indirectly to reform of the House of Lords. George's ideas were also taken up to some degree in Australia, Hong Kong, Singapore, South Africa, South Korea, and Taiwan. In these countries, governments still levy some form of land value tax, albeit with exemptions.

In Denmark, the Georgist Justice Party has previously been represented in Folketinget. It formed part of a centre-left government 1957-60 and was also represented in the European Parliament 1978-79.

In the 2004 Presidential campaign, Ralph Nader mentioned Henry George in his platform.

Hong Kong is perhaps the best example today of a successful implementation of a high land value tax. The Hong Kong government generates more than 35% of its revenue from land taxes.. Because of this, they can keep their other taxes low or non-existent, and still maintain a budget surplus.

Predecessors

Those who expressed similar thoughts before Henry George include: Benjamin Franklin, John Locke, John Stuart Mill, William Ogilvie of Pittensear, Thomas Paine (notably in "Agrarian Justice), William Penn, Adam Smith, Patrick Edward Dove, Herbert Spencer and the Physiocrats.

Famous Georgists

Criticism

Although both advocated worker's rights, Henry George and Karl Marx were antagonists. Marx saw the Single Tax platform as a step backwards from the transition to communism. He argued that, "The whole thing is...simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one." Marx also criticized the way land value tax theory emphasizes the value of land, arguing that, "His fundamental dogma is that everything would be all right if ground rent were paid to the state."

On his part, Henry George predicted that if Marx's ideas were tried the likely result would be a dictatorship. Fred Harrison provides a full treatment of Marxist objections to land value taxation and Henry George in "Gronlund and other Marxists - Part III: nineteenth-century Americas critics", American Journal of Economics and Sociology, (Nov 2003).