LAND VALUES AND TAXATION.

New Zealand Times, Volume LXIX, Issue 3735, 9 May 1899, Page 2

LAND VALUES AND TAXATION.

(By P. J. ©’Began, M.H.R.) ilr" Longdill’s letter dees not dispose ol the fact that the writer misstated the purport of taxing land values when he contended that my argument in defence of it involved advocacy of the equal division ot land among individuals. ISo man of average intelligence would for one moment conclude that to argue that the land is the common property of the people must imply that everyone should have a piece of land, t'ue English philosopher, Hobbes, has very aptly likened society to an animate being —" the Greater Leviathan—the different associations being analogous to the different organs of the physical body, each organ having its own specific functions, but stilt acting in unison with the others, and thus conducing to the life of the whole. The analogy is perfect, and might still further be extended by comparing trade to the’ blood of the physical system. Society is, indeed, inconceivable without this differentiation of parts. But not one occupation could be possible without land. Robinson Crusoe on his island had to grow and cook, and do all things necessary for his sustenance. But if, later on, his man, Friday, cooked what Crusoe grew, he thus enabled the latter to attend to something else. In this we have the crudest beginnings of society; and 1 the same economic laws which hold good then are equally true when society reaches its most complex existence. Keep this truth in view, and you will clearly see that, no matter how involved society may appear, it must always imply the use of the earth. If the rent of land were taken for the common good, the right of each individual would be secured, because (1) the produce of labour would not be taxed; (2) monopoly of land being impossible, land would be owned only by those who used it. Hence the mere ownership of land would imply no unjust privilege; and therefore common rights would be also asserted.

Says Mr Longdill: “If all the wages at present paid with money collected as rent* were suddenly to stop, through the confiscation of rent by the State, a tremendous number of people would be thrown out of employment.” This virtually amounts to arguing that wages are paid out ot rent—that is, the wage—fund, or, at least, a part of it. The contention is absurd on the face of it. Labour creates its own wages. Wages aro but a part of the product of labour. The very people who argue that wages are paid out of a wage fund ’ will tell you that capital is the savings ol labour, thus acknowledging that labour comes, in the necessary sequence of things, before capital. Press these people a little more, and they will tell you that labour cannot be employed without capital. Therefore labour cannot be employed until the savings of labour have been accumulated. Mi- Longdill's argument is equally untenable. He gives rent the place of honour instead of capital; but, as a matter of fact, rent cannot possibly arise till some land comes to have a greater value than other laud, and no land can have value without labour. Ricardo's law; it that rent is equal to the difference between the productive power of the best and worst, land in use. Wages really are what remain to labour after rent has been paid, and the reason why wages tend to decline as' population increases and material progress advances is that rent (land values) continues to increase; in other words, that tho increasing need to rise land enables landowners to exact more and more from labourers for allowing them to have access to that element without which physical existence is impossible. - Herein we have the cause of the unemployed difficulty, the 1 cause of falling wagssrtho cans? of want in the midst of abundance. There are men out of work in Wellington to-day—some of them inay read this. Why are they out of work? Why are they compelled to beg for the privilege of being allowed to work? ;Is it because there are too many people in. New Zealand? Manifestly, not. Population, is .the one thing necessary under proper conditions to make our country great. Is it because they are unable to work? Place them on an uninhabited island, and they could work and live—provided the island was not the private property of someone else. ; Yet they are helpless and indigent in a land smiling with abundance. Even admitting that tho taxation'of land values would not accomplish for these unfortunate men alf that its votaries contend, how can any thoughtful person defend for one moment taxes which fall on them? If any people should be freed from tho obligation to pay taxes, it is the poor and those who depend on their labour alone. Yet lot anyone look through the tariff and tell me if everything the worker eats and wears, everything necessary for the sustenance ot his children, is not taxed, and therefore, made artificially dear.' In tho face ot these undeniable facts, however, there are people who wonder why young people are afraid to marry, and why married people are afraid to have children. If Mr LongRill was in my position—besieged daily by people in search of something' to do, he would, I believe, agree that there is something practically beneficial in what he derides —shifting the revenue taxes .from sugar and clothing.” ‘ *

If the taxation of land values involved merely a change in taxation, and nothing more, there might be some justification for discounting the enthusiastic hopes of those who advocate it. But anyone who reflects for a moment will see that it involves a great deal more. Land monopolists complain that it'means "confiscation,” because they know well that the tax could not be transferred, as other taxes are, in the form of enhanced prices. ' .The truth is that it involves the assertion of the true principle of property. Whatever anyone produced by his labour would be his. It would secure a just distribution of wealth, since no one could get more than he earned. It would make use the sole title to land. Yet wo are airily told that it is merely " shifting taxation/' I once again protest against the persistent misstatement that the reform would injuriously affect " the poorest and most hardworking of our sellers/’ Mr Longdili should know better.' No one appreciates more than I do the disabilities under which the average small settler-wins an existence from the land. But X object to using him as a tool in the interest- of landsharks and dealers in corner lots. The figures I have previously quoted should convince any fairminded person that the taxation of land values could not fail to benefit the small settler. How can anyone come to any other conclusion in the face of the facts: 01,500 landowners represent a total unearned increment of .£54,500,000, 76,400 owning <£8,621,000, the balance, 25,500, owning land to the value of ,£45,880,000. 'ln the face of these facts Mr Longdili politely suggests that I should advocate the removing of all taxes from agricultural land. If he understood the question he would know that this is what I have been doing all along.

Mr Longdill assures us that he has read " Progress and Joverty,” " Social Problems. But it is evident he has failed to fully comprehend them. " Progress and Poverty,” we are lightly told, " is chiefly a popular exposition of the theories of Ricardo, Mill, Adam Smith, and others.” It is difficult to believe that anyone pretending to a knowledge of politico-economic literature could make a statement so utterly" devoid of even a vestige of fact. One may" read " Progress and Poverty ” and learn nothing whatever from it of Ricardo's theories, except the law of rent, which has long since been regarded as a settled principle. John Stuart Mill called it the pons assinorum of political economy. The essential difference between " Progress and Poverty” and Ricardo's, and, in fact, any' other author’s work, is that Mr George shows how the law of rent co-relates end co-ordinates with the law of wages and the law of interest. Neither Adam Smith nor Mill attempted'to'show this. It is Quite true that George, has much in cornmen with Smith, and indeed, with every economist of repute. But Smith argued that there is a wage fund, and that de-

dining wages were explicable by the fact that increase in the number of labourers required more minute sub-divisions of tbe wage fund. This theory harmonises exj actiy' 'tvith the Malthusian theory, which Mill accepts. George denies both theories, and shows that there is no . wage fund, that wages are not drawn from capital, but produced by labour, and that hence increasing population, instead of being the cause of poverty, implies greater productive power (1) in consequence of there being more people to produce wealth, and (2f in consequence of density of population making possible greater economy and saving of labour by subdivision and specialisation of function and labour-saving machinery. Socialists have often attacked " Progress and Poverty/' but even Mr Lewrente Gronlund. in his “ Co-operative commonwealth/' frankly admits that Mr George's splendid refutation of the dismal doctrine of Malthus alone is enough to win him respect. Yet Mr Longdill coolly assures your readers that the book is onlj a popular edition of the works of Kieur io, Adam Smith and Mill. He cannot, however, tell that to anyone who has carefully studied these authors, without paying the penalty of exposure. In countries like Ireland or Poland, where agriculture is the chief industry, and w!.ere there is no middleman between the labourer and the landlord, it is readily seer, that the latter lives by the earnings of ibe former. But, as a matter of fuel, we have landlordism here in a miu- i more insidious form. The land monopopst doe® not here deliberately compel other people to work for him; but the laws of the country allow him to reap the benefit of the millions borrowed abroad and converted into public works; and the masses, who are robbed of their share of the soil, are obliged to pay hia taxes for him, which taxes fall on their scant and precarious wages. If anyone is disposed to think this an exaggerated picture, let him remember that four-fifths of the taxes are paid by the poor, who are the majority, and something like one-fifth by the rich, who are the minority. This is landlordism in cxcelsis, and if it. is allowed to go on there is poor prospect for "the unborn millions.' The people have the franchise. It would bo interesting to know how long they will tolerate this state of things. It is certain that, unless a change is effected, increase of population will only intensify the bitter lot of those who depend on work. ' r . ‘

That'landed property is essentially different from other property is a truth which men have always recognised. Turn where wo may this indisputable fact presents itself. The ancient Peruvians were scrupulously careful that no one was left landless, and it is not, therefore, surprising that Pizarro and his adventurers found among them none of the poverty with which they were familiar in Europe. “In all primitive societies/’ says M. de Layeleyc, “ the soil was treated as 'the joint property of the tribes, and was subject tC periodical subdivision. . . . No one, at any rate, was destitute, inequality, increasing from generation to generation, was provided against." Even iij comparatively recent times in England the owners of lami held their estates in consideration vices rendered to the State. Under the ancient Celtic law of " gaverkind.” landed property was treated very much in' the same manner as it was hy the Maoris, the chief of each clan being the steward for his people. No lawmaker has dealt with land so wiselv as did Moses. The modern money-bag who, in purse-proud arrogance, talks about "my land’’ would bo rudely shocked if he were told that what he,_ossumes in be bis was merely "the land which tbs Lord thy God lendeth thee/' I do not argue that the different, systems under which the common right: to land has been assorted are applicable to our own times, although there is much! in our present land laws which recall the Licinian laws of ancient Rome. But it can scarcely be gainsaid that the land now, as ever, should he treated in reality and not in theory as the heritage of the people, and reflection will convince any unbiassed student that this end can only he-seoured-hy the taxation of the unearned increment. Obviously, materials progress increase? land values, as Professor Thorald Regers long ago pointed out. It is this which ■accounts for the monstrous inequality ; in’ the distribution of wealth which characterises civilised life. It is this-which cause? some to he horn to inherit palaces, and others —beggary. Land, being private property, enables the owners of it to take xnord and more from labour, and labour-saving inventions will aggravate the evil. If machinery become so perfected that,labour was no longer necessary, those who had no land would have no title to live.- -If-ell the good things wo need fell from the skies, those who- had no land could not pick then! up. unless on the terms of;-owners, except, indeed, they confined their operations to what fell en tho public parks and thoroughfares.

Political economy finds no reason in nature for involuntary want. There is no reason whatever why everyone should not merely have plenty, but luxury. 1 always nrovided he is willing- to work. AVithi us',' however, the position is reversed. ' They are generally poorest who work hardest, and they wlio can manage to live without work are oulv those, generally speaking, who have, but they are the envied of society. There are so-called enlightened people who look on honest labour as degrading. Urider social conditions based upon justice no one.-however, but-the'mail who worked would have anything; poverty would he the sure indication of laziness. Poverty, we are often told,.is no disgrace; Poverty,’ as we know it, however, is disgraceful, not to those so afflicted, .but--to societv, because there is no need for it; it is t'htk ghastly offspring of injustice, ana the parent of greed, envy, and vice. It produces people worse-than barbarians in the midst of refinement and luxury; it degrades and embrutes human beings wild would otherwise be ornaments to society'. Men are never greedy of air or sunshine,because they are always assured of abundance of each, since we have not yet airlords or sunlords. But. men are greedy ah out meat and drink, because of the fear of falling into the yawning gulf of want which gapes contiually beneath them.- Greed is really an abnormal condition—the inevitable result of a state of society wherein poverty is the doom, of the mass of followbeings. Allow labour to have its full; earnings, and poverty cannot exist. But this end can never ho attained while labour,is denied free access to the earth, and at the same time compelled to bear tbe- burdens of taxation as well. Land is the element without which labour cannot be,, exerted. Surely He who imposed labour as the price of existence did not intend that men should he deprived of the opportunity to labour r The Creator has endowed us, indeed, with abundant gifts. But he has also imposed the inexorable condition that we shall deal justiv with each other—that we shall live and let live—that no one shall take what belongs to another. A land system which violates this eternal principle is essentially, cruel, uniust, and indefensible, and I feoi assured that, when the people perceive its baneful consequences, they will sweep it out of existence for all time. Addendum. —I regret-that my absence in the interior of constituency—l have been among the small settlers, of whom I am the arch-enemy, according to Mr Wilks—has prevented this being sent before now. There are several misprints in ,my last, " spacial law.” for instance, being printed " special law." But these would probably be read correctly by most of your readers. I notice that Mr Wilks accuses me of advising the Wellington Trades Council to "terrify settlers.” This is not true. The dictation is au invention pure and simple. Mr remarks had reference to the Conservative party, and were, as usual, plain enough to he unmistakeahle. fThis correspondence is becoming tedious and apparently interminable. It had better. therefore, cease with the foregoing assertion of the Georgian position.—Editor, " N-Z. Times."]