Wendy McElroy invokes 19th century British Voluntaryist Auberon Herbert’s critique against Georgism as “the best and most complete refutation of Georgism and the single-tax that she has have ever read.” I admit, I’ve never previously read Herbert’s critique. But now I have. And I remain unconvinced. And, frankly, I’ve read better critiques.
Let’s summarize his critique by a series of bullet-point summations:
“The open market is the only true and impartial distribution of property–the only distributor that does not employ favor and force.”
Georgism is an open market process for the impartial distribution of private real property. In fact, Georgism, both conceptually and empirically, is meaningless without an open market. The ground rents(frankly, calling such a tax is a misnomer) are determined by the free market.
“But if in order to turn a natural object into a useful object it is necessary to mix human labour with it, then it is reasonable to believe (I won’t now put the case more strongly) that the object in question must be capable of being owned by the owner of the labour; otherwise you would create this curious position that a man must give his labour, whilst the profit of the labour–at least, that is to say, a part of it–would go to somebody else;”
Labor is not a necessary condition to turn land into a useful object. Empirically demonstrated by the case of land speculation. And, once again, Georgist rent is applied against the “unimproved value of land,” not the improved value.
“I am sure my friend wishes to be consistent. He must remember that everything is in part a gift of nature. If his proposition is true about gifts of nature, why should one gift of nature belong to everybody. and another gift belong to the individual? The soil belongs to everybody, says my friend, because it is the gift of nature. But so also the apple tree at the bottom of my garden is in part (the largest part) a gift of nature. “Oh, but you have mixed your labour with it” he may reply. True. But then, as he has just shewn us very clearly mixing what is your own with what is not, you cannot enlarge your rights. The apple tree then clearly cannot be wholly mine–being in part a gift of nature; and if I wholly appropriate it without allowing any passers-by to pluck two-thirds of its fruits, I am nothing but a robber stealing from the public. So it is with every single thing you can name. If we cannot rightly appropriate gifts of nature, my friend is a robber as regard the coat he wears, the the loaf he eats. At every moment of his life he is defrauding the public. And here I should ask all readers to consider the awful, indescribable complications arising out of my friend’s dogma. Every article grown in every part of the world ought to be divided in parts between the grower and the rest of the world.”
Quite simply, Herbert conflates “equal distribution” with “equal access” in trying to create a moral dilemma for a position that treats land as part of commons. “The Commons” means “equal access to,” not “equal distribution of.” Treating land as part of commons is often conflated with “land collectivization.” But let us be clear: starting with a position of land as part of commons means everyone has equal access to land and for one to have exclusive use of land is an abridgment of another’s liberty, indeed, inalienable right, for their own use of such land. The privilege of exclusionary use of such land is a monopolization of resource that creates rent. This is Georgist rent.
I’ve read Benjamin Tucker’s critique of Georgism; I’ve read Murray Rothbard’s critique; I’ve read Roderick Long’s critique. I’m not convinced. The fact is, land or ground rents were a well established concept in classical economics. With the advent of the marginalist revolution and neoclassical economics, land would be lumped in with capital goods as an identical factor of production, which from a political economy standpoint, is a bad development in terms of assessing economic rent. From a marginalist standpoint, a compelling case can be made that Georgist rents are vital to an accurate reflection of opportunity costs that enforce the most efficient use of scarce resources in a free market. And that in an efficient free market where there are no Tullock economic rents derived from land ownership, there is no so-called “public goods problem.” Georgist rents flowing to a some sort of governing institutions or redistributed back to the general populace as a dividend constitute neither a wealth transfer nor a deadweight loss. From an institutional standpoint, I have yet to be convinced by any compelling counter-arguments.