Spencer Heath Archive

Item 2053

Printed booklet, “Society and Its Services: Why the Henry George Idea Does Not Prevail.”

August 7, 1940

 

 

 

 

SOCIETY AND ITS SERVICES

 

 

Why

The Henry George Idea

Does Not Prevail

 

 

The Science of Society Foundation

     Roadsend Gardens, Elkridge, Maryland U.S.A.

 

 

 

 

 

To the Director of the Henry George School

New York, N.Y.

 

Dear Sir:

 

In compliance with your request I submit the following:

 

All labor that commands a recompense and, there­fore, has value, takes the form of services.

 

All voluntary exchanges are exchanges of some kind of services.

 

Services are of two kinds: Services by production (physical) and services by exchange or distribution (social and contractual).

 

All services of production are applied physically to land and incorporated in it or applied to some product from land (capital) and incorporated therein.

 

All services of distribution are performed socially — by making and executing contracts or exchange agreements with respect to the ownership and use of land or with respect to products that have been made out of land and into capital.

 

Land ownership provides for the social (non-political) allocation and distribution of land. It is a defense and protection against and a refuge from the evils inherent in political control over the distribution of sites and resources.

 

The practice of land ownership or administration is the performing of these distributive services by contract and consent for value received and not politically by coercion and compulsion and without specific consent.

 

Ground rent is the voluntary and spontaneous re­compense that the served members in a community pay in order to obtain this service and thus have protection against private violence and disorder on the one hand, and against the monopolization of sites and resources under the control of political favorites on the other.

 

When the land owning real estate interest extends its services to include the protection of its land using tenants and purchasers against taxation and other political compulsions, then new ground rent automatically will arise in ample amount to finance this extended public service and to compensate them for performing it.

 

This will not only diminish and finally remove the blight of taxation, but it will, at the same time, introduce a positive and profitable process for supply­ing all public protection and safety, and security against aggression from without or political despot­ism from within.

 

Further, it affords a sound and practicable pro­cedure for the financing of every public improvement and community facility having use and value to the community and, therefore,   making the community more prosperous and more productive, thus generat­ing ample ground rent for the maintaining of such public improvements and facilities.

 

Thus may public needs be met and public affairs carried on by a public authority with entire freedom of contract and consent on both sides and without resort to compulsions or confiscations of any kind.

 

Social order can exist only so far as the members of the society serve and receive services by the voluntary engagements of exchange and consent. It is in this practice of contract and consent — this free­dom of property and exchange with respect to public services and advantages as well as to private one(s) — that the natural law of society must be fulfilled. In the words of Henry George, we must seek the “laws which are a part of that system or arrangement which constitutes the social organism or body eco­nomic, as distinguished from the body politic or state … These natural laws … though they may be crossed by human enactment, can never be annulled ….” (Science of Political Economy p. 428). “To freedom alone is given the spell of power which summons the genii in whose keeping are the treas­ures of the earth and the viewless forces of the air.” (Progress and Poverty p. 523)

 

What I have endeavored to condense would be abundant in its content for a lengthy treatise. I am, therefore, attaching to this letter a more extended statement for your possible further interest and consideration.

Very truly yours,

 

                              Spencer Heath

 

Roadsend Gardens,

Elkridge, Md., August 7, 1940

 

 

SOCIETY AND ITS SERVICES

 

Society is the association of men performing and exchanging services for each other.

 

A society can exist only in a community — a place where its members have something in common, (1) the public portions of the place, set apart for the purposes of communication and common use upon equal terms and conditions, and (2) the private or proprietary portions held in separate and exclusive possession and affording the use of the public parts with their public facilities.

 

When these private portions are owned, when they have proprietors, accepted and acknowledged as such, then and then only their use and possession can be held or distributed socially and democratic­ally by contract and consent of the market, by a merchandising process and, therefore, to all upon equal terms. Any alternative to this democratic possession and transfer by contract and consent would be possession by force, private or public, under either anarchy or despotism, barbarism or slavery.

 

The society, therefore, creates and maintains it­self, its very life from its inception, by establishing and recognizing proprietors to perform the vital service of making a social and democratic, instead of an arbitrary and compulsive, distribution among its members of all its sites and resources for which there is any present or prospective rivalry or eco­nomic demand. The recompense which the society spontaneously awards, by all its members’ consent, to its proprietary officers in return for this vital service of social distribution is called economic or ground rent.

 

Because this distributive service is performed socially by proprietors (however unknowingly), it is possible for land users to produce and exchange wealth and services with each other and out of this production to recompense the proprietors for their distributive services. Accordingly, where production is high, rent is high, where it is low, rent is low, and where there is no production, the land being out of use, there is no rent. This failure to produce is why an idle site or resource yields no rent and, therefore, has no present if, indeed, any value.

 

This service of social distribution by ownership and proprietary administration is not any cause of land lying out of use; it is the only means whereby it can be peaceably apportioned and securely possessed and, thereby, come into productive use. What causes land and resources to lie idle is the “schemes of tax­ation which drain the wages of labor and the earn­ings of capital as the vampire bat is said to suck the life blood of its victims.” (Progress and Poverty p. 426)

 

Land ownership protects the land user against the arbitrary allocation of land by political (coercive) authority and, thereby, prevents monopolization of the desirable sites and resources by political persons or by their special privilegees. Land ownership keeps an open market for land and thus prevents its arbi­trary monopolization; but although land owners have lately been purged of all their historic political and despotic power, they have not yet extended to their tenants and purchasers any protection against the political appropriation by taxation, and the like com­pulsive procedures, of their wealth and capital values. This fast advancing blight on the use and employ­ment of capital destroys the economic demand for land and its resources and thus renders it idle and sets all its values into progressive decline.

 

When the land owning interests have become sufficiently enlightened, they will extend their pres­ent merely distributive services to the protection of their communities against the ravages of political government and eventually put into practice that noble prescription of Henry George: “To abolish all taxation save that on land value.” To carry out this program will be seen as the peculiar office and function of the land owning interest as such, for this interest has no other business wherewith to concern or profit itself but the interest and welfare of the community that it serves and upon the productivity and prosperity of which it depends for every increase of its present or prospective incomes and values.

 

Every land-using interest or business, of whatever kind, has its own private capital to administer and its special clients, customers and patrons to serve. It is in business to receive and employ the services of others and to transmit those services, together with its own, to its own clients and customers. It is not its business to administer those services, either public or private, that it must buy, but only those that it has bought and must sell. There is no social process involved in serving one’s self, but only in serving others, and being served by others in ex­change.

 

Individual users of land with their several diverse interests must have public services performed for them. They cannot perform private services for others (their customers) and also public services for themselves at the same time. Only the general land-owning interest that depends on public welfare for its public values can properly perform the public services. This interest, as such, conducts no private enterprise or business. It has none but public services to perform and public revenue to receive. It is, by its nature, set apart and specialized for the social (non-political) distribution of sites and resources, for the protection of its sources of revenue, and for the business of administering the public capital and im­provements into authentic public services.

 

Land-owners (as land-owners) do not own any of the private improvements on land, but they are the beneficial owners of the public capital improvements by which the private sites and resources are served; for if and when the public capital affords any in­come, it can flow only to them. The private business of a community is done on its private property. The public business belongs on the public property and might well be so restricted and confined. It is not the private land-users’ business to attend to the public business. To do that would be to serve public services to himself. His business is private business.

 

 

Control and final abolishment of taxation is a public service that the public owners alone can most profit­ably perform. It is the one community service that private business and employment most needs and out of its expanding productivity would enormously re­ward in rising rents and values. Just as it is the business of the owners of a private community such as a hotel, with all its common services similar to those of a town, to conduct it in the interest of those who pay rent, so it is the peculiar and exclusive busi­ness of the owners of the larger public communities not only to make a social distribution of their spaces and resources but also to guard the private occupants against destructive taxation and provide them with all protection and other public service needful to their security and productivity.

 

When those immunities and services are obtained and performed for the occupants of the larger com­munities that lie wholly out of doors, the owners of these will be recompensed in rising rents and values upon a scale proportionate to the productivity re­leased and prosperity enjoyed. Every dollar of un­necessary taxation lifted will not only be restored to its producers, but will release new production doubt­less to the amount of several dollars more. The portion of this new exemption and new production that will present itself in the market as new demand for land will eventually exceed all former rent and all former taxes combined.

 

There will be no destruction of existing, but only the creation of new values. The new rent fund cre­ated by curbing the community servants will be more than ample to pay them, and it will of necessity and by self interest be so employed. Government by de­predation and destruction will be transformed into the administration of community property by com­munity owners for the creation of community serv­ices and community income and values. And none but the public areas and community properties will come under public or community control. Private property and spaces, exempt from taxation, will be inviolate, and if the public owners, through their profitable administration of the public business, shall become the “greatest of all,” it will be only as they become the common benefactors of their communities through giving their services to all.

 

Henry George proposed “to abolish all taxation save that on land values.” The exception was well taken. It is not necessary to abolish the taxes on land value. Such taxation abolishes itself, once labor and capital are made free.

 

Just as the taxation of industry prevents production and thereby destroys rent, so will its abolition release production and, thereby, not only restore but create new rents and values. With taxation of tenants abol­ished, land owners perforce must maintain public services or lose all their gains. To furnish the neces­sary services and funds for such maintenance would be only a normal cost of carrying on their business, and in no sense taxation, for it would be voluntary and purposeful and not compulsory or destructive but advantageous. If tenants could no longer be taxed to maintain public services, it would be economic suicide for land owners to let them run down.

 

But if the present taxation of land values should be indefinitely increased, as Henry George urged, then contractual rent would be degraded progressively into compulsory taxation. Land owners would cease to function and land users, as wealth producers, in­stead of being exempt from taxation, would end up with paying taxes compulsorily to politicians as public officers instead of paying rent by contract and consent to land owners as the public proprietors. Their last state would be far worse than their first.

 

Henry George wrote the briefest and only perfect prescription for the emancipation of mankind — essentially only three words, “abolish all taxation.” He dreamed deeply of abundance, freedom and peace. But in his wrath at wreck and wrong, his clouded vision conceived a dragon in the way and that man­kind must be saved through evil being attacked and destroyed instead of by services being performed and exchanged. And so, to destroy what he dreamed as a dragon, namely, property in land, he fitly urged an evil means to so evil an end. He invoked the same evil instrument, — taxation, — the abolition of which his sound and practical prescription proposed. His fair philosophy of freedom was tarnished and dishonored by his false and irrelevant doctrine of force instead of enlightenment and service. This it was that raised against his beneficent and construc­tive proposal, “to abolish all taxation,” such bitter opposition in his own day and that condemns it to indifference and neglect in ours.

 

The employment of rent instead of taxes as the honest and proper recompense for community services is the very heart and essence of the Georgian ideal. When it is discovered that property in land is a community service, a socially distributive or mer­chandising service given for value received, and that rent now arises in response to and because of this service, it can be seen that the service precedes and is the cause of the recompense. This is the natural law of recompense, of association in service — the same law that George expounds with respect to labor always preceding and being the source of wages and the cause of their being paid.

 

But the instrument that George proposed to employ to have all public services supported out of rent in­stead of taxation was itself taxation, the tool of tyranny, and not any instrument of service. All values are the products of services and all true services create the values that recompense them. Social salvation must come through services, and yet more services, to create new values and yet more values, and not through the taxation that is the technique of tyranny and always destroys values.

 

Henry George was not wholly unmindful of the services performed by land owners and he approved of their retaining recompense for their services. But when he proposed so enormous a public service as the abolition of taxation, he did not propose that any­one should be recompensed for this great service. He failed to observe that land owners alone are in a sole and special position to perform it and that none others would be recompensed for it. He suggested that if millionaires should make free gifts to cities, this would only raise rents; but it did not occur to him that if the owners of the cities should provide further great services, such as the abolition or even a mitigation of taxation, the further new rents and great values that would arise would be their natural and proper recompense for such services. He did not perceive that his proposition in what he called its “practical form” would be self-enacting, self-executing and, best of all, self-liquidating. Lacking this clear insight, he urged a compulsive technique of taxation and not a truly educational technique of enlightenment and service.

 

Henry George, the dreamer, the mystic, poet of freedom, herald of the social dawn, visioning beauty and beneficence and abundance in the order of man, he fired the fainting hearts and renewed the languished hopes of many men. And he put his “proposition into practical form;” but he burdened it with a moralistic, destructive and belligerent propaganda against property in land that obscured its natural and transcendent virtue, arrayed against it “the classes
most to be benefited by it” and foreclosed its healing beauty from the sound and sober counsel of the world. He sought to “establish general principles” and he charged his readers to make further application of them than he had done. When this trust has been fulfilled, when the splendors of his constructive ideal are allowed to shine, then his proposal to abolish all taxation will find wide acceptance and will redeem to peace and beauty this dark and
bleeding world.²⁰⁵³

 

 

Spencer Heath

Roadsend Gardens

Elkridge, Maryland

August 7, 1940