Spencer Heath Archive

Item 1234

Typed letter on personal letterhead, Butler Hall, Morningside Drive at 119^th Street, New York City, to Stephen Bell, Clifton NJ, with penciled corrections and some extensive additions

12 November 1937

 

 

 

Dear Mr. Bell:

I have finished your life of Dr. McGlynn. I read without eating, drinking or sleeping until every one of its 505 pages was finished — and I am a slow reader. “There were giants in those days.”

     But what a sad and sorrowing pity that all of that fear and hate and martyrdom had to be gone through with! And all because the minds of these great men failed to dis­tinguish the functions of proprietary officers of society exercising its jurisdiction over its territory from the supposed ownership of mere land which can have no economic use or value whatever, except the value of the public ser­vices supplied to it, for without these services no persons could carry on exchanges of private products or services, and without exchange there could be no value of anything, in the economic sense.

 

     If those gratuitous and deadly slogans, such as, “Property in land is a crime,” “The capitalized value of rent must be destroyed,” etc., slogans that have no prac­tical meaning or value and that always arouse deadly fear and fighting resistance against the true and practical remedy for poverty and bad business: “To abolish all taxation save that on land value.” If only they could have concen­trated on the practical business of abolishing taxation, instead of wallowing in the morality and metaphysics and all the emotionalism of it, how much might have been saved and how much gained. And then constructive thinking might have shown how as taxes went down rents would rise in much greater amount and thus amply finance all deficit in taxa­tion; and as taxation went down there would be nothing for land owners to do but finance and administer the public services, if they wished to retain any part of their in­creased rents and values. And then they would find out that the better they financed and administered the public services the greater amount of net rent they could retain by way of recompense for their administrative services, like any other business men having charge of and selling any other kind of services.

     All of the great discoveries in the natural sci­ences have been made by men who delved into the order of Nature and her laws under the inspiration of the beauty that they sought and found. Such labors are esthetic, for their own sake, and not for other reward, and are carried on even despite persecutions most agonizing and prolonged. These discoveries are spiritual gifts to mankind. But they can be put to the practical service of society only through the operations of business and ex­change. The engineers, the Edisons and Fords, the men of business, must give bodies to these spiritual gifts and market them to the population in tangible forms.

     And so it is with Nature as she manifests herself in the living societies of men. Her laws must be discov­ered through pursuit of the beauty that is in them. This done — and Henry George did much in this way — then it becomes a matter for practical business to embody them in forms of greater service to men. Having discovered ground rent and its nature and its proper and profitable use, it becomes a plain matter of business administration and exchange to use it profitably for the public service of mankind. (It is no longer a matter of morals or metaphysics.)

     Consider the following questions from the stand­point of practical business:

     Are not the public services of government indispen­sable to the continuance of society, and therefore society can live only so long as government, on the whole, does less harm to its territory than it does good, and so creates ground rent?

     Does not present (not anticipated) net ground rent represent merely the difference between all that govern­ment giveth to its territory and all that government taketh away? Does it not measure the net that the community has left between the right hand of public service and the left hand of taxation and consequent public distress?

     Is not the public service the only service in the world in which the entire personnel consists of hirelings for wages and salaries and in which the proprietors who sell the services take no willing or active part in either the financing or administering of them?

     Are not public servants in need of proprietors to finance and supervise them and sell their services to the public just as much as private servants are?

    Is it not the proper interest of the landlords of a community to finance and administer the services they sell, the same as it is for the “landlords” of a hotel?

     If the owners who collect, in rents, the sales values of the services performed, either in a community or in a hotel, fail to administer the properties and super­vise the services and permit the servants to seize the property and regulate the affairs of the occupants, will not the one as surely as the other go bankrupt and event­ually cease doing business?

     Is not ground rent the income from the public bus­iness that is left after all labor and capital costs have been deducted by taxation, and if so, is not ground rent the net income yielded by the public capital? Is it not the market value of the net public services received?

     Is it not the order of nature and of society that only land own­ers can receive the net income from the public capital? Does not this fact constitute them the beneficial owners of the public capital and therefore, in a business sense, the real owners of that capital?

     Is it not highly advantageous for all parties that the real owners of the capital engaged in any service or enterprise should direct, finance and administer that ser­vice or enterprise? And will not this apply to public as much as to private services or enterprises?

     Without land owners to merchandize the public ser­vices to their tenants at market prices, would not every occupant hold possession by grace of political persons having full power to compel arbitrary tax payments instead of free payment of rent for a measured value?

     Could there be any secure possession if occupants were at the mercy of politicians as to the “rent” they must pay, the same as they are now as to the taxes they pay?

     It is small wonder, indeed, that Henry George, in practice, was opposed to public ownership (nationaliza­tion) of land, even if he did take what he thought to be a moral stand against private ownership.

     It is my clear perception that rent must be treated as private property in the hands of the land owner in order that he may distribute it properly among all the persons whose public services to the land create it, and that he, collectively, will do this as fast as he discovers his enormous economic interest in doing so; but this cannot occur except as rent is restored by the abolishment of taxes. Rent so restored will far exceed all present taxes and rent combined. And it will provide vast profits above all the proper costs of good public administration to recom­pense all the proprietors for performing that administrat­ive and supervisory service for which there is such sore need and for lack of which the social loss must be incalculably great.

Sincerely,

Spencer Heath

 

“A penciled note here says: “Continue per pencil notes,” and there follow seven pages of penciled notes on notepad paper:/

 

     Thus will be realized the high point in the practical application of the philosophy of Henry George, namely, to abolish all taxation save that upon rent (Progress & Poverty, Book VIII Ch 11), permitting the public services to land to be financed wholly by the rent paid for them on the basis of their market values freely and democratically ascertained. The great principle of Henry George that rent be appropriated to the support of public services becomes, upon the abolishment of taxation, self-enacting and self-executing, like any other great law of nature. So will government find its true and proper administrators in the proprietors who sell its services including their own services, to the public and who, taxes being abolished, must devote the proceeds of sales to the maintenance of the enterprises and services whence they arise.

 

     Automatically, as in other businesses, without coercion and by the rule of the market, the rent fund becomes, in the hands of the public proprietors, administered and appropriated first to the proper cost, at prevailing market rates, of the labor and the capital hired and borrowed in the public enterprises, and then to the proprietors such remaining amount as they have earned above all the costs of employing labor and capital and which falls to them by way of recompense for their services of supervision, administration and sales.

 

     Thus does government, when shorn of its predacious power of taxation, exalt itself into a service organization with the necessary proprietary and administrative personnel distributing its services to its customers on the equitable, democratic and voluntary basis of market value received and distributing the proceeds from its sales in the like equitable, democratic and voluntary manner among the personnel of its own organization, including the proprietors themselves.

 

     It is the glory of the constructive plan of Henry George that, by abolishing anti-social taxation, it leaves to public services no technique but that of exchange and so provides at last for the social-ization of government by lifting it up from the barbarous level of fraud and force to the social level of voluntary exchange and its assimilation with all the other services in the general exchange system whence society derives all of its life, growth and strength. Unless government be social-ized by abandonment of force and adoption of exchange there remains only a tragic alternative — the governmentalization of society and ultimate abandonment of all exchange and reversion to barbaric violence.

 

Sincerely,

 

/s/ Spencer Heath