June 9, 2013

Finest Hour 141, Winter 2008-09

Page 62

Ampersand – Churchill and Henry George

“Gentlemen, where are we going to get the money?”
—A frequent speech by Representative Robert H. Rich, U.S. Congress (Pennsylvania), 1929-42, 1945-51

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In “Ampersand” (FH 139:58) you quote Churchill’s 1928 speech explaining “why Henry George failed in his single tax proposal.” Churchill, then Chancellor of the Exchequer, said that “almost before the ink was dry” on George’s 1879 book, Progress and Poverty, “it was apparent that there were hundreds of different ways of creating and possessing and gaining wealth which had either no relation to the ownership of land or an utterly disproportionate or indirect relation. Where there were 100 cases twenty years ago there are 10,000 cases now.”

Unfortunately, Churchill did not favor his listeners with any examples of the 100 or 10,000 cases he claims existed. That was as impossible in 1928 as it is today, for we are all “land animals” from birth to death, and every activity we engage in, wealth-producing or not, takes place on some land somewhere, “land” in economics meaning all freely-provided gifts of nature—water; minerals; the electronic spectrum; solar, wind and tidal power; on rural and urban sites. George saw that the value of this “land” is community-created and thus the appropriate source of public revenue, making possible the abolition of all taxes on production.

The fact that the United States and the Western world now face a financial crisis brought on by the collapse of speculative real-estate (land) values is only one example of the accuracy of Henry George’s economic analysis. Despite having changed his position on the Single Tax, Churchill is probably best known by Georgists for the following quotation, from a speech delivered at King’s Theatre, Edinburgh on 17 June 1909: “It is quite true that land monopoly is not the only monopoly which exists, but it is by far the greatest of monopolies; it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”

Editor’s response: I did not know Georgists still existed, and am glad they do. I admire Henry George’s free thinking, and Churchill, as a fighting Liberal in the early 1900s, for taking the trouble to develop a synoptic understanding of George’s theories.

But as the late Labour MP Andrew MacLaren argued in our original article (“The People’s Rights: Opportunity Lost?,” Finest Hour 112:42), by the 1920s George’s “Single Tax” became inadequate as the basis of revenue: “Under the cruel heel of war and unemployment, Britons came to value security more and independence less. The emphasis in social advance shifted to the massive provision of public benefits, and the increasing intervention of the State in almost every area of human activity.” To say this has continued since 1928 would be an understatement.

Churchill in his speech was arguing for “rating relief” (tax reduction) to sorely taxed industries. He was searching for sources of revenue which would better distribute the tax burden, specifically in this case a tax on petrol—no doubt one of his 10,000 new “taxation cases” (cars didn’t exist in 1879). Here’s more of his 1928 speech (Complete Speeches V: 4420-21):

The idea that we could use the rating of site values as a substitute for this powerful, fruitful fiscal engine of the petrol tax is one of the greatest delusions. If we had to enter into a long discussion at present upon site values, that would be the surest way of obstructing all practical creative reform in the direction of the relief of rates on industry, and the rest of this Parliament would be spent in very exciting but utterly sterile arguments on the subject of land values, and on the principles which you should apply to their rating or taxation, and we should not make the slightest progress towards the very solid, serious task we have set ourselves to accomplish. Therefore I do not intend to make more than one general observation upon the question of site values, except to say that it is the best method of stopping the rating relief of industry.

President Reagan once shocked his listeners by suggesting that corporations really don’t pay taxes—they just pass them along to consumers in the form of higher prices. (The United States has the second highest corporate taxes in the industrialized world.) Henry George declared there was no right to untaxed ownership of land, air, water and sunshine (at a time when 400 families owned most of the land in Britain). Well, here I sit working at my computer, which is on a table, mounted on a floor, set in a house, anchored to a foundation, on a parcel of land. And though I pay land taxes, I have difficulty understanding how I could be taxed on the air the computer and I breathe, although I am sure our rulers are working on this. RML

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