“The Last Tax”

Introduction

In the aftermath of one of the nation’s worst economic disasters—the economic depression of the 1870s—the California journalist Henry George (1839-1897) strived to understand a distinctive dilemma of modern industrial capitalism: how could an era of unprecedented economic growth and industrial output produce widespread poverty, unemployment, financial panic, and acute inequality of wealth? The result of George’s investigation was Progress and Poverty: An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth. The Remedy (1879). The book challenged widely accepted doctrines of property rights and laissez-faire and changed the way many people thought about and understood political economy. By the close of the nineteenth century, Progress and Poverty had become an international bestseller and ignited a transnational land reform movement designed to end poverty in the modern industrial world.

Henry George proposed a deceptively simple solution to the problems of economic inequality and industrial depression. In contrast to other social commentators of his era who attributed economic disruptions to overproduction, under-consumption, or unsound monetary policies, George singled out one of the most cherished institutions of liberal capitalist societies: private property in land. He called for the replacement of all federal, state, and local taxes with one tax on the full value, or market price of land. His proposal became known as “the single tax” and those who supported it were called “single taxers.”

The single tax was neither a property tax nor a land tax. Unlike the general property tax which taxed the value of real estate (land) and personal property (buildings), the single tax only applied to the value of land. Furthermore, the single tax only reached land upon which value had attached as a result of land’s location and natural fertility. Under the single tax, land without value would not be taxed.

Taxing only land values would generate all the revenue needed to operate government, George believed, and doing so would produce ever greater levels of opportunity, as man’s right to the bounty of nature and his desire for a productive life was strengthened. Taxing only land values, George believed, would ameliorate and one day eliminate the hardship caused by continually bursting bubbles of land speculation. Finally, taxing only land values was not just the application of sound public policy, but the acknowledgement of a spiritual duty.

George employed a broad definition of land, arguing that the term applied not only to “the surface of the earth,” but all the “natural materials, forces, and opportunities” freely supplied by nature. George used this definition to determine the legitimate basis of private property and the scope of the single tax. Drawing on the ideas of the 17th century British philosopher John Locke, George argued that “There can rightfully be no exclusive possession and enjoyment of anything not the production of labor.” Farms, buildings, houses, machines, tools, etc., George claimed, represented capital—the result of combining one’s labor with natural resources. Unlike land, capital presented a defensible source of personal property and should not be taxed.

The distinction George drew between land values and capital helped distinguish the single tax from the general property tax. Since the Civil War, the general property tax has provided the bulk of revenue for state and local governments. Today, the general property tax accounts for more than three-fourths of all local income. Most state constitutions require that the general property tax adhere to the principles of uniformity and universality. Uniformity mandates that the same rate of taxation be applied to all types of property. Universality requires the property tax to reach all classes of property—real, personal, tangible, and intangible. The single tax would only tax the value of real estate and exempt personal property. In so doing, the single tax would violate the principles of uniformity and universality.

The distinction George drew between land values and capital also helped differentiate the single tax from socialism. In contrast to many socialists, who advocated public ownership of all factors of production, including capital, George only sought to make land common property through the socialization of land rent, or what many have called the “unearned increment” of land value. Socialists considered the single tax an incomplete antidote to poverty and wealth inequality and criticized George for his failure to recognize the unearned value in the profits of capitalists. Karl Marx referred to this increment as “surplus value,” which he defined as the difference between the value of the product created by labor and the price of labor—what labor is paid in wages. According to Marx, the private appropriation of surplus value accounted for the exploitation of labor in a capitalist economy.

Though he believed that private property in land was unjust, George did not support the confiscation or redistribution of land. Instead, he proposed to eliminate the privilege of private ownership of land by taxing its value. As he explained:

I do not propose either to purchase or to confiscate private property in land. The first would be unjust; the second, needless. Let the individuals who now hold it still retain, if they want to, possession of what they are pleased to call their land. Let them continue to call it their land. Let them buy and sell, and bequeath and devise it. We may safely leave them the shell, if we take the kernel. It is not necessary to confiscate land; it is only necessary to confiscate rent.

By rent, George referred not to the monthly fee tenants paid in exchange for an apartment lease, but to “economic rent:” a term which economist Michael Hudson has succinctly defined as “the profit one earns simply by owning something.”

George believed that rent accounted for the reduction of wages despite the increased productive power of labor. He also believed rent provided a legitimate source of taxation because it was “unearned.” By unearned, he meant that personal improvements did not account for the entire increase in the value of land. Instead, the natural richness of the soil, the growth of the surrounding community, and the proximity of land to railroads, canals, and other industrial developments determined the return landowners received for possessing land. Like the earth, rent was not the product of one man’s exertion, but the result of a combination of natural and social forces for which no individual could claim responsibility. As such, George argued that land values irrespective of improvements rightfully belonged equally to all members of the community. Through the single tax he proposed to socialize land rent.

George failed to outline a specific procedure for the assessment or collection of land values under the single tax. Nor did he specify which level of government—local, state, or national—should take responsibility for implementing the single tax. However, George believed that the single tax would be easy to collect and would not require the creation of any new government machinery. As he explained:

Our plan involves the imposition of no new tax, since we already tax land values in taxing real estate. To carry it out we have only to abolish all taxes save the tax on real estate, and to abolish all of that which now falls on buildings or improvements, leaving only that part of it which now falls on the value of the bare land, increasing that so as to take as nearly as may be the whole of economic rent, or what is sometimes styled the “unearned increment of land values.”

George also was a strong advocate of local self-government, believing that “in things which concerns only themselves, the people of each political sub-division—township, ward, city, or State, as may be—shall act for themselves.” These passages suggest that George intended for the single tax to be administered locally and by the same bodies then charged with the administration of the general property tax.

This dissertation reveals the significance of land ownership and distribution in late nineteenth and early twentieth century thought and discourse. By exploring the influence of George’s ideas on social and economic reform, I show that the author and his followers enjoyed more success than historians have hitherto recognized. That national, state, and local governments did not replace all other taxes with George’s single tax on land values should not obscure the importance of his work and its impact on some of the era’s most prominent social and economic reformers. Some of these individuals included: Sidney and Beatrice Webb, co-founders of the British socialist organization the Fabian Society; the popular and controversial New York City priest, Father Edward McGlynn; and, the streetcar monopolist turned public servant Tom L. Johnson, who served four consecutive terms as mayor of Cleveland from 1901-1909.

Aside from proposing a remedy to what many believed to be the political economy’s most vexing problem—the fact that progress seemed perversely to deepen social inequality—George’s work presented an original and compelling analysis of the causes of recurring industrial depression and economic panic. Furthermore, the lucid prose and impassioned tone of George’s writings resonated with the public’s growing interest in political economy. “Tens of thousands of laborers have read “Progress and Poverty” who never before looked between the two covers of an economic book, and its conclusions are widely accepted articles in the workingman’s creed,” observed the economist Richard T. Ely. Even those who disagreed with the single tax recognized the remarkable breadth and popularity of George’s work.

Despite the economic nature of his subject, George wrote for the common reader. He rejected the idea that one must possess a good deal of formal schooling to grasp the laws of political economy. “Although political economy deals with various and complicated phenomena,” George wrote, “these are phenomena which may be resolved into simple elements, and which are but the manifestations of familiar principles. The premises from which it makes its deductions are truths of which we are all conscious and upon which in every-day life we constantly base our reasoning and our actions.” George believed that the laws governing economic processes were easily observed and understood by those willing to study the world around them.

Toward a More Professional Discipline: Changes in Economic Thinking Circa 1880

The popularity of George’s work threatened a growing number of professional economists who, in the early 1880s, led an effort to formalize the study of political economy in the United States. The severe depression of the 1870s challenged accepted notions regarding the cause of financial panics and encouraged the study of how to prevent them. Classical economics sustained attacks from within and outside its ranks. Generally conservative economists, including M.I.T. President General Francis A. Walker, began to embrace a larger role for government in the regulation of economic affairs. Additionally, young American economists returned from Germany with new theories of and approaches to the discipline. Unlike many of their predecessors, this new generation of economists led by E.R.A. Seligman, Richard T. Ely, and John Bates Clark, challenged the idea that universal and immutable laws governed economic processes. Instead, they viewed economics as an evolutionary science, subject to variances based on place and time and which formed the basis for a new school of thought called neo-classical economics.

George stood at the nexus of this economic change. Rather than overturn classical economic theory, he hoped to reform it. For the most part, George accepted and utilized the classical economic doctrines associated with Adam Smith, David Ricardo, Thomas Malthus, and John Stuart Mill. Those doctrines had dominated economic thought in the Western world for nearly a century. Classical economics had changed substantially between the publication of Smith’s Wealth of Nations in 1776 and Mill’s Principles of the Political Economy in 1848, but as economist William J. Barber and others have noted, “an important thread of continuity – a common concern with the process of economic growth – linked the work of its main contributors.” From Adam Smith to John Stuart Mill, the field of economics was overwhelmingly concerned with the discovery of the economic laws that governed the production and distribution of wealth in society.

The work of Adam Smith (1723-1790) reflected three currents present in late-eighteenth century British thought. The first involved the celebration of philosophic liberalism in the works of Thomas Hobbes (1588-1679) and John Locke (1632-1704). The second included increasing dissatisfaction with the mercantile policies of the British Empire, and the work of the French Physiocrats comprised the third current. Under mercantilism—the term used by the critics of British economic policy—the state pursued policies designed to maintain a positive balance of trade and increase the stock of gold and silver in the country. Such goals led the government to impose heavy tariffs on imported goods and to constantly search for new markets for British products.

Mercantilism received its first major challenge from French economists Anne-Robert-Jacques Turgot (1727-1781) and François Quesnay (1694-1774), founders of the Physiocratic school of economics and popular during the reigns of King Louis XV and XVI. The Physiocrats centered their economic policies on agriculture, which they claimed represented the sole source of produit net (surplus value) upon which all sectors of the economy depended. Surplus value, according to Richard Ely, referred to “a reward or premium appearing in production for which nature rather than man is responsible, and which is not required to induce men to put forth the effort necessary to produce wealth.” Physiocrats believed surplus value represented a legitimate source of taxation and proposed, although it was never implemented, that the French government raise all revenue from an impôt unique (single tax) on land value. While George ultimately adopted the term single tax to describe his remedy from the Physiocrats he followed a different line of economic thought. As Arthur Nicholas Young has noted, for example, in contrast to George who believed the state should take the entire rental value of land, the Physiocrats envisioned that the impôt unique would take only a third of the total surplus value generated from agricultural land. Furthermore, George’s single tax was designed to fall on the value derived from all land, not merely the values generated from land used for agricultural purposes.

While Smith disagreed with the central Physiocratic premise that agriculture was the sole generator of productive surplus, he built upon Turgot and Quesnay’s critique of mercantilism. Smith’s analysis in A Wealth of Nations revolved around three questions: what motivates economic activity, what determines prices and wages, and what policies should the state pursue to encourage economic growth. Smith answered his first question with the following, oft-quoted passage: “Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society.” Self-interest, Smith believed, operated as a sort of “invisible hand” that directed individuals and nations, towards the employment and industries for which they were best suited. Given this, Smith promoted a minimal and laissez-faire role for government in economic affairs. He also, as economic historian John Mills has pointed out, opposed combinations of workers and employers for the tendency of such arrangements to restrain trade and disrupt economic activity.

To answer his second question regarding the determination of prices and wages, Smith relied heavily on the long-established labor theory of value. Although later economists, including David Ricardo and Karl Marx, added their own variations, the essence of the labor theory of value remained the same: the value of various goods and services is largely determined by the amount of labor required to produce them. Later economists criticized Smith for his failure to consider the margin of utility of various goods and services that affect their value.

After Smith, most historians credit David Ricardo (1772-1823) and his friend Robert Thomas Malthus (1766-1834) for the next major developments within the field of classical economics. In 1798, Malthus, a clergyman turned economics professor, published the first volume of An Essay on the Principle of Population, in which he investigated the major impediments to “the progress of mankind” and the possibility for their removal. In looking at the history of human civilization and the laws of the animal kingdom, Malthus discovered a “constant tendency in all animated life to increase beyond the nourishment prepared for it.” Furthermore, Malthus reasoned that since humans require food to exist, “the population can never actually increase beyond the lowest nourishment capable of supporting it.” Thus, the misery and fear arising from the lack of food necessary to support human life, serve as a “constant check” on man’s natural impulse to reproduce. Other less permanent checks to population growth include war, famine, disease, and moral restraint. Whether he intended it to, Malthus’ theory of population cast a long shadow over classical economics and, as Ely and others have suggested, probably contributed more than any other doctrine to the reputation of political economy as the dismal science.

The Malthusian theory of population certainly influenced Ricardo, who most famously fashioned the classical economic theory of rent. He used that theory to modify (or, as economic historian Robert E. Wright has suggested, to complete) Smith’s theories on the determination of wages and prices. George drew most heavily from Ricardo in the formulation of his own economic philosophy. Like the Physiocrats, Ricardo viewed agriculture as the dominant—although not the sole—generator of surplus value. He noticed a correlation between the rise of rent and an increase in economic production. Ricardo viewed higher rent, not as a cause, but rather a “symptom” of increased wealth and economic development.

Ricardo defined rent as “that portion of the produce of the earth which is paid to the landlord for the use of the original and indestructible powers of the soil.” In other words, rent was not the product of labor but the reward a landowner received for merely owning valuable land. Furthermore, Ricardo believed that in its natural and uncultivated state land lacked economic value; land only gained value—economic rent—when, as a result of the progress of society and population increase, less fertile land was brought into the market for productive use. Land of lesser natural quality always demanded more labor to produce the same value of goods as land of better quality. Thus, as he explained, “rent is always the difference between the produce obtained by the employment of two equal quantities of labor and capital” to land.

Ricardo insisted that the increase of rent also led to an increase in prices and wages. In his justification of this stance, Ricardo alluded to another of the most “dismal” theories associated with classical economics: the Iron Law of Wages. Under this theory, employers always paid the minimum wage—no more and no less—necessary to maintain the lives of their workers. Since the “natural price of labor,” Ricardo claimed, “depends on the price of food, necessaries, and conveniences required for the support of the laborer and his family,” when the price of rent increases, so must the price of goods necessary to maintain labor.

While accepting Ricardo’s theory of rent, John Stuart Mill (1806-1873) proposed an alternative theory of wages that proved equally gloomy. According to Mill, employers paid labor from a pre-established fund—the wages fund—in return for their work. Given this, as Mill argued in volume one of Principles of the Political Economy (1848): “Wages (meaning, of course, the general rate) cannot rise, but by an increase of the aggregate funds employed in hiring labourers, or a diminution in the number of competitors; nor fall, except either by a diminution of the funds devoted to paying labour, or by an increase in the number of labourers to be paid.” Mill’s theory assumed that nothing save an increase in the funds from which labor is paid or a decrease in the size of the labor force could increase the rate of wages. As a result, Mill argued, labor unions, strikes, boycotts, and any other attempt utilized by labor to increase wages must ultimately prove futile.

The economic theories of Smith, Ricardo, Malthus, and Mill largely dominated the field of political economy at the time George penned Progress and Poverty. Soon after its publication, and partly as a result of the book’s appearance, the field began to change and the discipline became more professionalized. Alarmed by the informal nature of economic discussion in the United States, in 1885 the younger generation of German-trained economists formed the American Economic Association to “replace the speculative economics of the day with a body of thought based upon historical and statistical investigation.” The following year Harvard began publishing the Quarterly Journal of Economics, the first professional journal printed in English and devoted to the study of economics.

In addition to becoming more professionalized, in the 1880s and 1890s, political economy also shed much of the doom and gloom it had inherited from classical theorists and became more humanized. The immense popularity of Progress and Poverty contributed to this change. As Richard Ely noted:

Henry George’s work “Progress and Poverty,” was published in 1879. In 1884, not five years later, it is possible to affirm without hesitation, that the appearance of that one booked formed a noteworthy epoch in the history of economic thought in England and America…A severe crisis in 1873, with all train of varied disasters, checked economic progress and brought the crushing weight of poverty upon tens of thousands. Bright visions gave place to gloomy forebodings, and six years later the ground was ripe for the seed sown by Henry George, till then an obscure journalist in the “Far West,” and the fruit has been abundant, and the promises for the future overwhelming.

Although they disagreed with much of his economic analysis and most of his conclusions, professional economists like Professor Ely noted the book’s wide appeal and applauded George for helping to broaden the scope and perspective of the discipline.

America in the Gilded Age: Economic Panic, Wealth Inequality, and Land Monopoly

Henry George’s ideas enjoyed broad salience in the decades prior to and immediately following the turn of the 20th century—the historical periods known as the Gilded Age and Progressive Era—because he addressed the issues of growing importance to a majority of Americans: financial panic, wealth inequality, and land monopoly. In 1879, when the first edition of Progress and Poverty appeared, the country had just emerged from a long depression of trade and agriculture with staggering levels of unemployment and wealth inequality. According to historian Nell Irvin Painter, in the 1880s the wealthiest two percent of the population earned more than half of the aggregate income and the wealthiest one percent owned more than half of the property in the United States. “This tiny class of rentiers,” Painter writes, “received as large a total income from its property as the poor half of the families received from both property and wages.” The majority of Gilded Age Americans survived on hourly wages that sustained a bare existence. While the rich became richer, the poor grew poorer. According to historian Philip Foner, in 1870, the Census Bureau estimated the average annual income at just over $400 per capita; ten years later that number had fallen to a little over $300.

George’s followers extended beyond those who advocated for the single tax. Populists drew on his description of how land reform would benefit small and individual farmers struggling to compete with corporate growers. Labor activists believed Progress and Poverty addressed workers’ constant struggle to maintain wages high enough to cover the increasing costs of urban life. The United Labor Party nominated George as its candidate for mayor of New York City in 1886. State and local government officials utilized the single tax in their efforts to municipalize natural monopolies such as street cars, electricity, and water delivery. George’s social ethics inspired religious leaders in the U.S. and Great Britain to more actively question the morality of social and economic policy. Irish nationalists and their supporters in the U.S. applied George’s ideas to attack landlordism and advocate for greater representation of Irish interests in Parliament. The publication and popularity of Progress and Poverty in Britain in 1880 helped jumpstart the modern British socialist movement.

The growing awareness of what George’s contemporaries called the “land crisis”—the shrinking of the nation’s once vast public domain—in public thought and discourse by the end of the nineteenth century helps account for the enormous popularity and success of Progress and Poverty. In his elucidation of the causes of poverty and industrial depression, George promoted the “land question” to the highest importance. As he had observed while living and working in California, monopolization and speculation drove up the price of land, reduced labor’s net wages, and fostered a system of landlordism. Additionally, state and federal land policy accelerated the shrinking of the public domain, which George believed had not only served as a source of national strength and independence, but also prevented rule by aristocracy.

Fourteen years before the appearance of Frederick Jackson Turner’s famous essay, “The Significance of the Frontier in American History” (1893) George argued that the disappearance of the public domain threatened America’s exceptional progress and democratic character. “This public domain has been the transmuting force which has turned the thriftless, unambitious European peasant into the self-reliant Western farmer; it has given a consciousness of freedom even to the dweller in crowded cities, and has been a well-spring of hope even to those who have never thought of taking refuge upon it,” he explained. Anticipating Turner’s frontier thesis, George argued that the vast supply of public land found at the edge of eastern settlement had served as a buffer to shield democracy from the excesses of capitalism and industrialization.

The press echoed George’s concerns. Fearful of the rise of landlordism—the system in which most of the land is owned by a small class of landlords who charge others to live and work upon it—as a result of large purchases of the public domain by a handful of individuals and land speculators, the North American Review devoted four issues to the topic in 1886. Additionally, the editors appointed a special commissioner, Thomas P. Gill, to investigate the extent and growth of landlordism in several states. As various authors, including George, debated whether the number of tenants was in fact increasing faster than the number of landowners, all agreed on the importance of cheap and available land to a healthy democracy. According to Gill, “The soil of a country is like the blood: once it is badly vitiated it seems impossible ever to cleanse it, and the poison keeps constantly breaking out.”

Even Henry Strong, another contributing writer in the series who doubted the severity of the land crisis, recognized the benefits of a wide distribution of land ownership in America. According to Strong, “Every man who owns the land he cultivates has given a pledge to sustain law and order; to resist and put down the despotism of anarchy, whether it appear in the unmasked conspiracy of anarchy, whether it appear in the unmasked conspiracy of Catiline, or the less threatening but more dangerous guise of socialism.” George and other late nineteenth century commentators believed that land ownership promoted stability, virtuous citizenship, and shielded America from the “revolutions and agrarian agitations” that plagued Europe.

George’s ideas also enjoyed a wide reception because his discussion of land policy and taxation in Progress and Poverty built on longstanding political traditions and Americans’ growing interest in curbing monopoly power at the end of the nineteenth century. Since the colonial era, tax revolts and crusades for land reform have been two of the most prominent expressions of popular political and economic discontent. The importance of land throughout American history stems, in part, from its association with individual economic and political opportunity. According to historian William Cronon, the perception of land as a commodity that could be bought, sold, and traded has significantly influenced economic, ecological, and human relationships throughout North America since the colonial era. European colonists viewed uncultivated land as useless and wasteful and implemented a system of enclosure in response to God’s command to “subdue the earth” and Locke’s supposition that “As much land as a man tills, plants, improves, cultivates, and can use the product of, so much is his property.” Fixed boundaries and improvements conveyed ownership of land and the wealth derived from its soil.

More than the perception of land as a commodity, however, the resolute belief in man’s natural right to the use and enjoyment of the earth influenced American land policy and approaches to social and economic reform. George’s proposal to discourage private property in land through the taxation of land values, as historian Mark Hulliung has pointed out, “was in reality a recapitulation of a century of American pronouncements on the inviolability of the social contract, the need to secure the rights of the next generation, and the natural right to the land.” America’s founders believed that prior to the creation of governments, man possessed nothing but the uncultivated earth from which to provide for his sustenance. Upon entering into a social contract and forming a national government, individuals did not relinquish their natural right to the land, but instead, empowered government to protect and preserve that right for current and future generations.

Both Thomas Jefferson and Thomas Paine considered it a primary duty of civil government to protect man’s natural right to use and benefit from the soil. As Jefferson explained in a letter to James Madison, “The earth is given as a common stock for man to labor and live on. If for the encouragement of industry we allow it to be appropriated, we must take care that other employment be provided to those excluded from the appropriation. If we do not, the fundamental right to labor the earth returns to the unemployed.” Given that the earth provided the main source of employment, Jefferson reasoned that if governments allowed land to become private property, society must also ensure that other fields of employment remained open to those without access to the soil.

Paine expressed a similar concern in a pamphlet titled Agrarian Justice (1796). He believed that an essential component of the social contract included the guarantee that “every person born into the world, after a state of civilization commences, ought not to be worse than if he had been born before that period.” If a person was to be found in a worse state, Paine argued that provision should be made to aid in his comfort. To Paine, land monopoly, the purchase and hoarding of large tracts of the public domain by private individuals and families, violated this principle of civilization.

Paine believed that access to land was a natural and essential human right.

Similar to George’s single tax, he argued that “landowners should pay both a lump sum and an annuity to all deprived of their birthright.” In other words, Paine believed that landowners should essentially purchase the land they owned from the state and pay an annual tax for holding that land. In justifying his scheme, Paine distinguished man’s natural rights to land from those “artificially” created by society, such as the right to personal property. “Land…is the free gift of the Creator in common to the human race,” Paine wrote, “Personal property is the effect of society; and it is impossible for an individual to acquire personal property without the aid of society, as it is for him to make land originally.” He concluded that personal property beyond what one man could produce proved impossible without the aid of society and often occurred as a result of “paying too little for the labour that produced it.” Paine’s proposal to support the poor and landless from a tax on monopoly holdings of land did not amount to charity, the revolutionary believed; it represented the fulfillment of the social contract by recognizing every man’s natural right to the soil.

Congress did not adhere to Jefferson and Paine’s warnings regarding the dangers of allowing the nation’s land to become concentrated into the hands of a small class of landowners. From 1780 through the end of the nineteenth century, the sale and appropriation of the nation’s vast reservoir of “free” land provided the central function and source of revenue for the federal government. The Land Ordinance of 1785 outlining a system for the transfer of public land into private hands remained largely unchanged until 1862 when Congress passed the Homestead Act. Under the earlier system, after Indian land had been relinquished to the federal government—often by force—federal land surveyors marked the land by a grid of six square miles and divided it into one square mile sections, which were then sold as townships or to individuals at a public auction. Any land not sold at the auction could be bought from the federal government initially for $2.00 an acre before it was reduced to $1.25 in 1820. Because the federal government originally did not discriminate against who could purchase public land or how much, speculation was rampant, especially during the middle decades of the nineteenth century when thousands of settlers moved out west for economic opportunity and to fulfill the nation’s “Manifest Destiny.”

Land speculation had consequences beyond increasing land prices and making it harder for the common individual to purchase land. Speculation in land, as in any other commodity, encouraged gambling. Investors took out credit on the expectation that values would continue to rise, and as long as they did, the economy expanded. In 1837, however, following what Cronon has called “the most intense land speculation in American history,” the land bubble burst, banks recalled their loans, and “millionaires teetered on the edge of bankruptcy” sending shock waves throughout the economy. Widespread unemployment and a retraction of available credit resulted. The federal government did little to prevent speculation in land because without it, according to historian Richard White, the land system might not have worked at all. Cash strapped farmers who lacked the capital to buy land outright often turned to speculators, who loaned them the purchase price, with interest.

Calls for land reform and an end to speculation usually surfaced in hard economic times and were often led by proponents of labor, who believed America’s vast public domain should operate as a safety valve to relieve eastern unemployment and poverty. In the aftermath of the Panic of 1837 newspaper editor Horace Greeley and labor activist George Henry Evans joined forces to support national land reform. Using the slogan “Vote yourself a farm,” Evans organized workers into the National Reform Association (NRA) and lobbied Congress to grant public land to wage workers. In a move both to raise revenue and broaden individuals’ access to land, Congress acted on the NRA’s proposals when it passed the Homestead Act in 1862. The Act granted individuals and their families 160 acres of public land in exchange for a small filing fee and five years of residence. After six months, homesteaders had the option to purchase the land outright for $1.25 an acre.

In addition to the history of America’s land policies, the nation’s long tradition of property taxation informed George’s single tax proposal. While the federal government mainly relied on public land sales and tariffs for revenue, local and state governments utilized direct poll and property taxes. The Constitution prevents the federal government from levying direct taxes by requiring uniformity and the apportionment of all direct taxes based on population. “The apportionment of direct taxes,” as historian Robin Einhorn has explained, “was and remains an almost laughably unfair way to distribute the tax burden.” If Congress were to levy an apportioned tax, Einhorn continued, it “must fix a population-based quota for every state and then levy the separate tax rates in each state that will raise these quotaed sums.” An apportioned income tax would mean that residents of small, but rich states would pay a lower percentage rate than residents of larger, but poorer states.

Historians disagree on the motivation behind the uniformity and apportionment clauses of the Constitution. Einhorn attributes the measures to the efforts of slaveholders to prevent Congress from taxing slaves at higher rates than other types of property, thereby, attempting to abolish slavery through taxation. Other historians have explained that the limitations stemmed from the framers’ shared desire to limit the power of the federal government by removing Congressional power to “preempt the use of property taxation by state and local governments.” According to historian W. Elliot Brownlee, the founders viewed taxpaying as “one of the normal obligations of a citizenry bound together in a republic by ties of affection and respect.” For most citizens of the early republic, state legislatures and local councils played a larger role than the federal government in their lives. By 1860, general property taxation represented the dominant source of income for most state and local governments.

Most Americans accepted property taxation, Einhorn writes, as the “best way to distribute tax burdens to individuals in proportion to their total wealth.” Although provisions varied from state to state (or even county to county), in addition to land, taxed property usually included houses, farms, livestock, machinery, furniture and liquid assets such as bonds, stocks, and loans. Like the federal government, many states passed uniformity clauses to prevent certain types of property, such as slaves in the South or financial assets in the North, from receiving differential treatment. Behind these decisions, as Einhorn has shown, was the desire to take politics out of the decision of who should pay taxes. Whereas southerners supported uniformity to prevent legislatures (in the new age of universal white male suffrage) from levying higher taxes on slave property, Northern governments adopted these clauses, she has argued, because they “misunderstood them.” By passing uniformity clauses “they thought they were prohibiting lower taxes on financial and corporate assets. They actually were prohibiting higher taxes on these assets.” In addition to uniformity clauses, the goal of property taxation—to distribute tax burdens based on the ability to pay—was further corrupted by lax regulations regarding property valuations and assessments, leading historian C. K. Yearly to claim, “Before the enactment of Prohibition probably nothing in American life entailed more calculated premeditated lying than the general property tax.”

Given the long history of property taxation in America, some of George’s critics viewed the single tax as merely an attempt to reform the corrupt system. By the end of the nineteenth century, some economists had begun to advocate for the replacement or supplementation of property taxes with levies on corporate profits and personal income. Economists—on the right and the left—accused George of naivety for believing a single tax on land values could raise enough revenue to support the activities state and local governments. The Progressive economist and supporter of income taxation, Edwin R.A. Seligman devoted a chapter of his book, Essays in Taxation (1895) to discrediting the single tax. Its main economic weakness, Seligman believed, was that it was inelastic and “inevitably intensifies the inequalities resulting from unjust assessments” of land values. Conservative economist Francis Amasa Walker argued that the single tax would do nothing for workers, whom he claimed needed to become better “economic agents” through sobriety, education, and “freedom from premature family responsibilities.”

George’s ideas received almost as much criticism from the left as the right, which makes any attempt to classify the land reformer difficult. Progress and Poverty appeared among dozens of books advocating various reform schemes, and George represented merely one of several individuals committed to the eradication of poverty in the industrial world. But unlike many of his contemporaries, George more firmly grounded his ideas in traditional Christian values and the belief in natural and a priori truths. In this way, as historian Anthony Francis McGinn has claimed, George represented something of an “anachronism” among late nineteenth and early twentieth century reformers.

The appearance of Progress and Poverty in 1879 coincided with the early beginnings of an epistemological swing away from the use of natural law theories and toward a more experiential-based understanding of knowledge and justice. George was on the other side of this shift. As judges, lawyers, and policy experts were beginning to rely more on social scientific methods to understand the world and its problems, George rooted his social philosophy in the belief of a higher order based on the fundamental and “moral” law of human progress. “Political economy and social science cannot teach any lessons,” George wrote, “that are not embraced in the simple truths taught to poor fishermen and Jewish peasants by One who eighteen hundred years ago was crucified.” Although it could also be confirmed through the principles of the political economy and the application of modern social science, the simple truth of the injustice of private property in land was a natural and therefore moral law. By embracing a role for Christianity in social reform, George attracted a number of religious reformers who struggled to secure a place for faith in an industrial world faced with problems that only science and reason seemed capable to solve.

While many historians have noted the religious tenor of Progress and Poverty, few have explored the depth or origins of George’s spirituality and its impact in attracting the support of Christian reformers who used the single tax to further religious goals. I address this oversight by examining the influence of George’s ideas on two of the era’s most formidable religious activists—Anglican clergyman Stewart Headlam and American Catholic priest Edward McGlynn. Both drew on elements of George’s philosophy to inform their social activism and encourage other Church leaders to become more involved in secular matters that affected the lives of their congregants. I have selected Rev. Headlam and Father McGlynn because both men adapted the single tax to further specific and clearly defined religious goals. For Headlam, these goals included greater religious tolerance for secular activities including the ballet. McGlynn pursued the single tax to find personal spiritual satisfaction and like Headlam, to carve a larger place for organized religion in social reform.

Despite the existence of both conservative and progressive elements in George’s thought, historians have tended to identify George as a key protagonist in the story of American radicalism. John L. Thomas, for example, presents George alongside two other prominent journalists—Edward Bellamy and Henry Demarest Lloyd—whose works, he argues, collectively formed a new and “alternative” view of America that both preserved and adapted “inherited liberal creeds” to the post-Civil War era. Central to the thinking of all three men, and especially to George, Thomas claims, was the desire to return to a producer-based economy composed of small and diversified units. Thomas locates the radicalism of all three reformers in the various schemes and methods each proposed to realize their utopian visions. The single tax, with its aim to socialize land rent, embodied George’s revolutionary spirit.

I challenge the notion that the single tax represented a radical reform. By looking seriously at the works of George’s predecessors including Thomas Paine, Thomas Spence, William Ogilvie, John Stuart Mill, and many others, this study elucidates the long tradition in American and British history of proposals to tax land values for the purpose of making land more accessible to a wider class of people. George’s immense popularity stemmed in part from the way the single tax built upon ideas, values, and concerns deeply rooted in the American and British experience. Concerns about the distribution of land, a belief in man’s natural right to use the soil, and the notion that some resources belonged outside of the private market influenced the efforts of social reformers on at least two continents for more than a century prior to the publication of Progress and Poverty.

George’s popularity and lasting influence, however, also derived from his ability to connect the various grievances of turn-of-the-twentieth century Americans to the nation’s legal treatment of land and land values. The causes of wealth inequality, unemployment, financial panic, and the exploitation of wage earners, George illustrated, resulted from the monopolization of land and the treatment of land values as the private property of individuals instead of the common property of the community which helped create them. George showcased the universality of the land question; he showed that the issues of land ownership and distribution represented urban and rural concerns as they affected farmers and wage earners alike.

The transnational influence of George’s ideas warrants more attention from historians. Within a decade of its publication in 1879, Progress and Poverty became an international bestseller and was translated into dozens of languages including Russian, German, French, and Yiddish. George attracted more converts to the single tax abroad than at home. Daniel Rodgers goes further than most historians in his recognition of George’s international influence.

Although the bulk of his 1998 study of the transnational exchange of ideas and reforms during the Progressive Era focuses on those transplanted from Europe into American municipal, state, and national governments—including old age pensions, workers insurance, city planning and cooperative farming—Rodgers makes clear that this one-sided exchange was not inevitable. As he writes:

That American progressives should have found themselves drawing so much more heavily on the experience and ideas of their European counterparts than Europeans on theirs was no historical given. In the transatlantic radical world of the 1880s, the biggest splash of all had been made by the American radical economist Henry George. His influence on Australasian labor politics was formative; his five tours of Great Britain and Ireland in the 1880s took the islands by storm. The Fabian society was jolted out if its initial gauzy spiritualism by George’s lectures on land monopoly.

George’s transatlantic impact sprung in part from the fact that he viewed land the way social reformers had come to view certain resources such as education, transportation, water—as a resource too precious and important to allow competitive market processes to determine its use and distribution. “Against the onrush of commodification,” Rodgers writes, “the advocates of social politics tried to hold certain elements out of the market’s processes, indeed to roll back those parts of the market whose social costs had proved too high.” For George, land was the most important of these elements. “The Last Tax” reveals the centrality of George’s ideas to the era’s transatlantic exchange of social political ideas and reform technologies.

This study also builds on the work of Charles Albro Barker and his 1955 account of George’s life. Besides a rich source of biographical detail, Barker’s study provides a useful framework for thinking about George’s legacy. While for some, Barker writes, the single tax presented a powerful fiscal antidote to corrupt and inefficient tax systems, others emphasized its potential to affect major political and moral change. In the pages which follow, I reveal the influence of the single tax in all three areas of reform.

Chapter One explores the events, experiences, and ideas that motivated and influenced George’s writing of Progress and Poverty. It also examines the book’s reception among academic economists and argues that Progress and Poverty changed the course of economic thought and discussion in the United States. Even its detractors admitted that Progress and Poverty generated more enthusiasm, debate, and general interest in political economy than any other text published on the subject at that time. This chapter also traces the origins of the term “single tax” and discusses the ideas it encompassed. In 1887 George adopted the term single tax to describe his plan to rid the world of poverty, industrial depression, and acute inequality of wealth by replacing all federal and state taxes save one on the full value of land. The single tax represented more than a mere fiscal reform. To George, the single tax encompassed his spiritual, moral, political, and social understanding of the world.

George’s views especially resonated with British audiences who had more direct experience than Americans did with the evils of landlordism and land monopoly that George denounced in Progress and Poverty. Chapter Two shows how George’s ideas echoed more than a century of British thought that asserted private property in land violated man’s natural rights. While the issue of land ownership had long dominated British politics, George helped redefine the question and reveal its significance to other pressing concerns. Unlike land reformers before him, George more purposefully and effectively connected the system of land ownership to unemployment, poverty, and wealth inequality. In doing so, George unintentionally encouraged many to advocate for the nationalization of all factors of production in addition to land. This chapter shows how the publication of Progress and Poverty in England in 1881 fueled calls for land reform throughout the country and helped inspire the modern British Socialist movement.

The connection between land reform and labor activism is deep and under-appreciated in U.S. history. Chapter Three uses the New York City mayoral election of 1886 to explore these connections as well as the reasons for George’s widespread popularity among the working classes in the Gilded Age. In doing so, it both builds upon and challenges the claims of John L. Thomas and Thomas O’Donnell who have argued that George’s support among the working classes mainly derived from his particular republican ideology, which celebrated those who labored for themselves and denigrated those who lived off the labor of others. This chapter demonstrates the central role of land reform in the campaign and how George’s proposal to shift the burden of city taxes onto land values helped attract both middle and working class supporters.

Chapter Four examines the religious dimension of George’s ideas and their impact on two of the era’s most important Christian reformers.

Throughout his life, George challenged the complacency of organized religion to rampant suffering and criticized the tendency of religious leaders to attribute poverty to divine providence or moral deprivation. The popularization of his ideas in the 1880s and 1890s pushed some socially-minded churchmen to become more involved in secular affairs and prompted their efforts to abolish poverty and reduce wealth inequality through land reform. The work of New York City’s Father Edward McGlynn on behalf of the single tax “christened” him into the world of politics; after encountering George’s work McGlynn enjoyed a successful, albeit controversial, career as a fervent advocate of social justice and leader of the interdenominational Anti-Poverty Society. For the eccentric Anglican priest Stewart Duckworth Headlam, the single tax provided a political method for establishing a Christian social order. The lives and work of Headlam and McGlynn illustrate the ways some Christian reformers mobilized around the single tax to achieve important religious goals at the end of the nineteenth and early twentieth centuries.

Chapter Five reexamines the political career of millionaire streetcar monopolist Tom L. Johnson and explores the ways the single tax inspired his efforts as mayor of Cleveland to municipalize public service monopolies in the city. As mayor, Johnson worked to reveal the public’s stake not only in land values, but also in the enormous value of public franchises, which rarely depreciated and tended to increase without any effort by the owner. The single tax and municipal ownership of public utilities required a larger degree of local autonomy than most U.S. cities enjoyed in 1900. In his efforts to secure these reforms, Johnson and other progressive reformers throughout the country also fought for measures designed to increase the governing power of cities vis-à-vis their state legislatures. Such measures included the initiative, referendum, and municipal home rule—the authority of city government to levy taxes and pass legislation without interference from state lawmakers. Single taxers so dominated the direct legislation movement in the United States that opposition to the initiative leaned heavily on arguments against land value taxation.

George disliked the idea of establishing colonies to “test” the single tax. He feared that the limited nature of such experiments might cause them to fail and thus detract from the public reputation and acceptance of his philosophy. Despite his warning, George’s followers set up more than a dozen single tax communities in the United States, Europe, Australia, and Asia. Chapter Six explores the early histories of two such communities, established at Fairhope, Alabama and Arden, Delaware. Both communities empowered the local government to assess and collect the full value of land to finance public works and cover all other state and local taxes charged to the residents. Both communities also experienced difficulty carrying out this plan. Although designed to demonstrate the justice and practicability of the single tax, neither community came close to the collection of the full value of land. The colony leaders faced precisely the sort of difficulties in calculating and collecting land rent that single tax critics had predicted. On the other hand, the colonies’ ability to provide free and discounted public services to its residents demonstrated one of the many benefits of deriving local revenue from land rent anticipated by George’s supporters. Additionally, both Fairhope and Arden inspired social developments unpredicted by either side.

The Conclusion reviews the dissertation’s findings and discusses an area in need of further research: the relationship between the decline of the single tax movement and the rise of the federal income tax. Although Henry George opposed all forms of taxation save that of a “single” tax on the value of land, many of his followers, including Pennsylvania Congressman Warren Worth Bailey supported and helped draft the Revenue Act of 1916, which, as the historian Elliot Brownlee has argued “transformed the experimental income tax into the primary instrument of federal taxation…” What accounts for Congressman Bailey and other single taxers support for the federal income tax? More importantly how did their involvement inform the contours of this critical piece of legislation in the history of the nation’s tax system? These are a few of the questions posed in the conclusion to guide future research on the impact of George’s ideas in the Progressive Era and thereafter.

The history of the single tax provides a unique lens through which to study and understand the changing social, economic, and political conditions facing Americans at the turn of the twentieth century. The tremendous popularity and reach of the single tax into seemingly disparate movements such as the Social Gospel, labor politics, and local efforts to municipalize public services testifies to the importance of land in the discussions concerning how to best protect democracy and secure equal opportunities for all citizens. This dissertation considers the ways reformers in the Gilded Age and Progressive Era drew on George’s ideas to affect meaningful reform.

“The Last Tax” presents an intellectual biography of the single tax—a social history of a political idea. The virtues of such an approach include the flexibility to trace the lives of a man, Henry George, and his idea, the single tax. I show how the life of the single tax—as many great ideas often do—transcended the physical and temporal existence of its originator. This approach also allows me to demonstrate the historical continuity and change embodied in the single tax. While the single tax built on long-standing political ideas including natural rights philosophy it also reflected the spirit of turn-of-the-century Americans—a people struggling to understand the sources of vast inequalities and the paradox that industrial progress seemed to deepen poverty. Moreover, as the wealth-poverty conundrum continues to plague social progress, I submit that the simple force and beauty of George’s idea will draw to it those who seek to explain and resolve this paradox. In advancing the single tax, George built a bridge for understanding the chaos of economic inequality in modern society that others will traverse to find solutions in succeeding generations.

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