Spencer Heath Archive

Item 1175

Copy of letter from Heath, 310 Riverside Drive (Roerich Museum Apartments), to Mrs. Marie D. Sarker, 1 Northern Av., Apt 5B, New York City

June 6, 1935

Dear Mrs. Sarker:

I appreciate the interest you have taken in my presentation of the social philosophy of Henry George, the practical application of which he sums up at page 404 of Progress and Poverty as follows:

In its practical application, what we propose is

. . . To abolish all taxation save that on land value.

Your letter inquires just how this will benefit persons engaged in the cleaning and care of office buildings and similar work. My reply is that the lifting of all the charges and restrictions on trade and production that government, by its taxing and police powers imposes, will permit an enormous increase in the production of wealth by every form of unrestricted business activity and therefore a mighty advance in profits and every other form of wages to all persons engaged in this free activity. Under this condition every business could expand its production and exchange its products and services freely with every other business, since there would be no restrictions on exchange. This expansion of production creates an unlimited demand for labor. Every employer has large earnings out of which to offer higher wages to hold his present employes and induce new ones to come to him. With this untrammeled production there is no lack of wealth with which to pay increasing wages. The old competition between disemployed laborers for work at starvation wages is turned into competition for laborers between employers all of whom are on a rising production at every stage of exchange up to the ultimate consumers and are therefore able and willing to pay rising wages in money, nominally, but really out of the increasing quantities of consumers’ goods. In such a market as this there is also increasing demand for buildings and other facilities, both private and public, for carrying on business. This calls for more workers in connection with the care and maintenance of buildings. In this line, as in all others, the demand for laborers would exceed the supply, except at the greater wages that the greater production of wealth would provide.

It may now be asked how the expenses of government could be raised without laying any taxes or restrictions on production and trade. With all other levies abolished, the services of government would of necessity be financed out of the rent that all active business, as land users, would pay in order to have access to and enjoyment of these services. In this way, the cost of government is apportioned automatically among the wealth producing users of land in the exact proportion that government services are used by or made available to them. Then, as now, every dollar paid in rent would be a profitable dollar used for the purchase of advantages that only the government or its authorized agents can supply. These rent dollars, passing through the hands of land owners, would provide the interest payments on all the public capital invested in the streets and other public domain, all the wages and salaries of the public servants, high and low, including those who employ and direct the salaried public servants. This last class would logically and reasonably be those who collect the rents, for the amount of rents they collect would depend entirely on the quality and efficiency of the work of the public servants, because it is only for these public services that any rent is paid. It is highly probable that land owners, collecting all the rents and supplying out of them all of the costs of the public services, would, by their desires and by common consent, see to it that all these services were well performed. Some part of the rent paid for these services would be due to this supervision and would be retained as compensation for this kind of service and its amount would depend upon how well the public services were supervised. Those who could give the best supervision would remain or become owners of land and those who could best supervise and administer private services would enter or remain in private enterprises.

 

I have gone into these latter things to show you how the emancipation of labor and capital from taxes and restrictions not only raises all wages, profits, interest, rents — every proper income or revenue out of enormously increased production — but also to show you how government is reduced at the same time to becoming purely a service agency and how there automatically arises the sole and proper revenue for the public services and also a class of persons, namely, land owners (as distinguished from land users), whose sole interest and advantage lies in their seeing to it that the public servants are capable and efficient and the government services well performed.

 

It was a magnificent achievement of the brain and heart of Henry George that, out of all the dismal theories of his time, he found the path to social and economic well-being and was able to lay down that right and simple public policy of unshackling industry entirely and defraying public costs out of the rents paid for public services, thus solving at once the three great problems of  (1) The disemployment of labor and capital with consequent monopolies, speculation, debt burdens, stagnation of trade and downward competition for jobs between the disemployed and distressed, (2) The great difficulties and distresses attending the raising of public revenues and, (3) The notorious maladministration of the government services, functions and finances by political gangs who themselves have much to gain and nothing to lose by corruption and who are not supervised or directed by any class who have all to lose and nothing to gain except by honesty and efficiency in the conduct of public affairs.

Sincerely yours,