geoism equality surplus henry george


single tax rent tenants

Pure Geoism

by Fred E. Foldvary, Senior Editor, 4 February 2013

Geoism is the social philosophy and theory of absolute human equality, with the belief that each person is properly and fully a self-owner and an equal owner of the surplus from nature and from communities.

Human equality is the proposition that all human beings have an equal moral worth, because there is in human nature no inherent master/slave or superior/inferior relationship. Geoism takes equality to its complete logical conclusion.

The term "geo" refers to land, as in geography and geology, and also constitutes the first letters of George, the economist and philosopher Henry George, who most thoroughly synthesized the moral, economic, and historical elements of geoist theory. The policy that implements geoism in a governmental context, for the purpose of public revenues, is often called "Georgist." The term geoism has been used since the 1980s as a more generic name, since the concept was known before the works of Henry George, is not necessarily tied to everything George wrote, and has been greatly expanded by his followers.

Whereas Georgism is associated with a single tax on land value, and consequently free trade (trade free of all tariffs and other taxes, as well as quotas and other impediments), in its purity, the geoist philosophy that derives from the premises results in a non-statist conclusion.

Complete and equal self-ownership implies that each person fully owns his body, life, and time. Self-ownership therefore implies that a person owns his labor and therefore the wage of his labor and the products of labor. Any tax on wages and goods violates self-ownership. Moreover, when a worker saves some of his wage, and loans that portion of wages to someone else, the interest obtained is fully owned by the worker lender, and when a worker borrows funds and pays the interest from his wage, that interest payment is also wages, and all such wages should be non-taxed. Also, if a worker chooses to give some of his wage to another person, that fund is still a wage, and should not be taxed as a gift or inheritance. Hence, all further transactions of the original wage, and gains from lending or investing the wage, have to be free of taxation.

The single-tax movement of the followers of Henry George proposed to replace all taxes with land-value taxation, or equivalently, the taxation of land rent. Broadly, land-value taxation includes pollution charges that in effect charge for the use of land as a dump. Land rent is a surplus, a yield of land after the payments due to labor and capital goods. Rent is a surplus as a gain beyond costs, because land has no economic cost; land is not produced from human action.

Georgist policy thus to a large extent implements the self-ownership of wages and the equal benefit from the rent due to nature and due to the population and commerce of the community. However, such policy assumes that an imposed government is the proper agent of the people and provides public goods for generally equal benefits.

Since self-ownership does not apply to natural resources, a pure application of equality implies that the benefits from land belong in equal shares to human beings themselves rather than their governmental agents, even if the agents are elected representatives. Elected representatives are voluntarily chosen at best by a majority of the voters, so minority interests who voted against the officials are not really represented, and in practice, the policies of governments also cater to special interests that receive subsidies at the expense of the public.

A pure application of geoism collects the natural rent and distributes it equally to all persons on earth, and it collects the rent generated by population and commerce, and distributes that equally to the residents affiliated with the relevant community. Since the rent is paid by the tenants of the land, and is distributed to the residents, the person having title to the land should play no role. In geoism, the title holder properly owns the rights of possession, but not the rights to the rent, and the right of possession is conditional on paying the rent.

The "Georgist" statist implementation of land-value taxation typically copies the current property tax in collecting it from the "land owner," after the "owner" has collected the rent from the tenant. (In owner-occupied land, the title holder is also the tenant, and in effect, as tenant pays the rent to himself in the role as owner.) The collection of rent from title holders creates political resistance from property "owners" who think that the rent really belongs to them. The community collection from tenants explicitly recognizes that the payment from tenants to the people is the proper initial distribution of the rent rather than a redistribution.

Since the rent does not belong to the title holders, the land rent should not be paid to them in the first place. The community should collect the rent directly from the tenants. The rental due to the building should be paid to the title holder, and also, a small amount of the land rental may be kept by the title holder in order to facilitate the sale of land having no building value, by generating a small positive price for the sale of land. This small portion is a transactions rental that is attached to the labor of transferring title, rather than a pure rent.

In geoist principle, the natural land rent, due to nature rather than public works and commerce, should be collected and then distributed in equal shares to all human beings. Every person would receive a human rent dividend (HRD), a monthly payment received as one's share of the natural rent. Additionally, each person would receive an equal share of the locally-generated land rent. People would then voluntarily contract with or affiliate with a community or club or company that provides public works and civic services.

Public works and civic services such as transit, streets, highways, security, fire protection, and parks, generate rentals that are really a result of the labor and capital goods that produce these services. The rentals may well be paid to the service provider, whether it is a private or governmental enterprise. The concept is practiced by private communities such as hotels and homeowners associations, in which guests, tenants, and co-owners pay dues, rentals, or assessments to the company or association.

To summarize, in pure geoism, the land rent is paid by tenants to an agency that represents the people. The rent-collecting agency then distributes the locally generated land rent to the members of the local community, and sends the natural rent to the global agency that then distributes the rent to all the residents of the earth. The rent that belongs to young children or to incompetent adults is sent to the responsible guardians for the use by the beneficiaries. The rentals due to public works and civic services are paid to the providers.

Since there is today no global agency to distribute the rent to all persons, geoism has to be practiced in the forms feasible today, such as the collection of the rent by local or national governments, either for distribution in funds, or in services. The statist implementation of a Georgist single land-value tax is the best one can hope for today, but we should keep in mind the pure implementation of geoism as the ultimate direction of reform. For example, the collection of rent from tenants rather than "owners" may reduce the political opposition that today prevents the tax reform that would benefit even most of the landowners who resist it.

-- Fred Foldvary

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Copyright 2010 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.

Also see:

Land Booms, Capital Stretch-Out, & Banking Collapse
http://www.progress.org/2012/landboom.htm

America is 10th on the Heritage Freedom List
http://www.progress.org/2012/students.htm

What's the Fair Price for Land Rent?
http://www.progress.org/2012/gazaland.htm

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