Tolstoi on Henry George and Single Tax
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J. K. Ingalls. "Tolstoi on Henry George and Single Tax." The Twentieth Century. 20, 11 (March 12, 1898) 9-12.
TOLSTOI ON HENRY GEORGE AND SINGLE TAX.
BY J. K. INGALLS.
In American Review of Reviews for January, Count Tolstoi has a notice of Henry George and the Single Tax. The tribute he pays to the memory of this prominent reformer is just. It is only one particular of Geo treatment of the Land Question which I desire to examine. Mr. George, with all s thoroughness of investigation, still took one of the accredited doctrines of the Political Economists on' trust and gave it a credit atld scope to which it is not entitled. I refer to the Ricardo Theory of Rent. ThlS he denominates "Economic Rent," yet confounds. it with Tribute, or landlord rent. While defining this latter rent is the "price of monopoly," he draws no distinction between them, and virtually treats the two- as one. Count Tolstoi follows blindly in the same error; but could not have done so, had he taken a moment' to analyze the nature and' operation of these two forces, which resem ble each other in no respect but in name, as will be ~een:
First. Economic Rent is derived only through application of labor to choice soils and situations, and so would wholly disappear if all places were equally desirable. Tribute or the price of monopoly is derived from privilege, lordly dominion of the land, and would be unaffected in every way, did all holdings become equd,1}y desirable.
Seetmd. Economic Rent is modified by the discovery of new uses for inferior holdings, and operates to promote self-employment. Tribute rent attaches to all lands, fertile or otherwise, and its operation is to incrp,8.se industrial dependence, and enforce idleness.
Third. Economic Rent is simply the excess of the earnings of labor, over its consumption, and so is an exchangable quantity. Tribute rent has no economic equivalent tor which it can be exchanged. It takes something for which nothing is given.
Fourth. Economic Rent accumulates by equal differences, as 0, J, 2, 3, 4, 5, 6, etc. Monopolistic rent, by geometrical ratio of 2, as I, 2, 4, 8, 16, 32, 64, etc., so that in the time the one attains 10, the other equals 1,024. No equazion is possible with such ratios. No "supply and demand" C:ln have scope with such un· equal proportions.
Fifth. EconomlC Rent is an alternating quantity; sometimes above and sometimes below the mean or average. An abundant crop on superior soil, will at times exchange at a disadvantage with a short crop of some other product on an inferior soil. The soils below the average usually yield no economic rent. Monopoly rent falls on all SOlIs, however, rich or poor, while at the same time the monopoly enables lands to be held out of market, for sporting or speculative purposes.
Thus David Ricardo's II Theory of Rent," has been stretched to cover what is due solely to a prerogative of arbitrary power. And neither Mr. George nor Count Tolstoi has detected the subtle perversion of the truth. They have embraced both of thes6 distinctive and in. compatible forces as one and the same. Neither of these eminent and conscientious men has attempted to show any necessity for interfering with the working of economic law. Nor could the Single Tax, with unlimited leases be different in its operation to rob labor of its earnings, from the rack rent under allodial titles, or lee simple. For only the hartnleSs economic rent could be taxed back, or confiscated under the Single Tax, limited or unlimited. B<"'cause totax the increase of the leaseholder, would be, nota single, but a doulJl~ tax, with no reference to the rental value of tho land
Admitting that the si'ngletax would compelthe selling of unused land, those able to hold the land and extend their cultivation, would thus help increase production, reducing the price of products. Holders unable to improve and make profitable use of their land would throw it on the market; reducing the demand for leases to the lowest point. The economic rent would alone be left for the government. Without the "limitation of estates in land," advocated by Geo. H. Evans. and the pure Land Reformers for more than seventy years, the entire Tnbute Rent now paid to the lord of the land, and who whether deed holder or lease holder, would then pay only the economic rent to the government for his privilege, to use the land. Mr. George seems to have had a glimmering of this truth, for he contended that rent of capital and rate of wages would increase, as rent diminished, and which would necessarily result under unconditioned leasehold. It is evident that Count Tolstoi did not consider this, for he refers to existing back rents in Russia as remaining the same now as under the Single Tax. It IS quite certain that rent of capital would greatlV appreciate but that wages would appreciate permanently, there is not the least probability.
The condition of the poor migbt be temporarily alleviated by a proper distribution of such rent, but experience does not encourage the expectation of equity in such distribution. Besides government would have to make good the losses on inferior soils, and restore the exhausted fertility, of others.
With the limitation of holdings in Mr. Alfred Russel Wallace's "Land Nationalization," the remedy of Mr. George would doubtless prove salutary in a country where the leasehold, as in England, is the only recognized title to land. But such limitation applied to allodial titles, would be still more certain of beneficial results.
But it may be properly asked, I think, why not remove the cause of the evil? That is, the law created private might to forcibly take tribute for use of land one cannot or prefers not to use, or of money or plant one does not care to take the trouble of employing-. To repeal the laws collecting monopoly rent, interest or profit, or dues of any kind, except where economic increase is distinctly shown, would certainly eliminate the forces now active In the accumulation of large estates, either real or personal.
The advocates of the Single Tax have shown much adroitness,in repelling the argument that the landlord could shift the tax to the tenant. And this is not possible, to be sure, where, he has already taken all the surplus earnings of the tenant. But he has another resource. Any title to land or improvement of same, has value only as it yields increase. When the rent ceases, the land has no price to the landlord and he will have no difficulty, with unlimited leases, in transfering the "chose in possession" to a "chose local," and charge "all the traffic will bear" as rent, interest or profit upon his bui1dings, stock and plant, or money invested.
- Joshua King Ingalls, “Tolstoi on Henry George and Single Tax,” The Twentieth Century 20, no. 11 (March 12, 1898): 9-12.