Spencer Heath Archive

Item 1298

Carbon of a letter from Heath to Lewis Jerome Johnson, 90 Raymond Street, Cambridge, Massachusetts

February 1, 1940

 

 

 

Dear Professor Johnson:

 

I am writing to thank you very much for the delightful hospitality you and Mrs. Johnson gave to Mr. Kendal and me upon our recent visit to Boston and vicinity. We certainly enjoyed it very much from the personal point of view, and were also very much interested in your particular emphasis and interpretation of taxation reform along the general lines proposed by Henry George. Mr. Kendal is one of those persons of Georgian persuasion who not only believes that we should make further investigation in the directions marked out by him, but also that George imposed upon his readers and followers a trust that they would make further application of the general principles laid down by him as he explicitly states in the opening paragraphs of Progress and Poverty.

     I have read with much interest your little red booklet on Taxation from an engineer’s point of view, and am pleased to find you among those who are not rigorously trammeled by the traditional approach or by the moralistic and destructive point of view.

     My own departures have, perhaps, more to do with method than with subject matter, for I believe that all the things that distinguish civilized man in society from his nomadic predecessors have come to him by those services which have been reciprocal through being performed for profit (recompense) in the regular channels of trade and exchange. I believe that all improvement has come about through practice of the exchange process and relationship, and that moral or philanthropic measures have never resulted in any exchange or other values.

     I am greatly interested in Henry George’s final formulation in that portion of his great work entitled, “The Application of the Remedy,” namely, “to abolish all taxation save that on land value.” I am constrained to believe that this abolition of taxation which you call “Government Taxes” is a kind of public service that is above everything else the primary social need of every community. I believe that this service can be performed on an exchange basis for value received, and that it cannot be performed successfully in any other way. This service must be performed either with or without recompense. If performed without recompense, it must be done by those who either rob themselves to serve others, or who would rob Peter to pay Paul. Either would be contrary to the way in which permanent results would be obtained.

     There is, however, in every community a class of persons (or interest) who are owners, but who do not own any private property or capital but who only own the territory of the community, and who, thereby, merchandise to the community members so much of the public advantages of every kind as the members of the community can profitably possess and enjoy. These are the persons who derive all their income by acting as the social distributors of community advantages for value received. I speak of this as social distribution because it is the only kind of distribution that is based on contract and consent without compulsion or coercion, or any arbitrary determination by political authority, involving as it must, favoritism and privilege, and eventually complete monopolization by political beneficiaries.

 

     From this you can see that I regard the merchandising process, which converts community benefits into market values, and thus puts all persons on an equality with respect to them, as itself a public service of the very highest value. Without this service, all sites and locations would necessarily be allocated by preference and privilege, and without the peaceable and equitable distribution that is to be had by the process of exchange for value received. To land owners now performing this distribution by the merchandising process every prosperous community makes generous award for their services. When communities become more prosperous, they rapidly increase these rewards. As they become less prosperous, the community advantages become less salable and ground rent or, as you prefer, “Economic Taxes” steadily decline.

     Since land owners, as such, derive no revenue from any business but the public business and, as such, have no other business, it properly falls upon them to give their attention to the administration of public property and affairs, and to do this in the interest of their tenants and customers to whom the public advantages are sold. It, therefore, falls upon them to discover what services their tenants and patrons most need and to supply them with such public services as they most need and for which the owners will be thus most recompensed in ground rent. It is likewise to the business interest of land owners not only to police and protect their tenants against “government taxes” and other public evils resulting from them, but also, on their own part, to carefully avoid every practice or policy that would be in any way injurious to their tenant and, thus, impair or destroy the recompense they receive for public services in the form of “government taxes” /”economic taxes?”/ or ground rent, as it is more commonly called.

     There is a great deal that I could say in elaboration of the proprietary administration of public services in contrast with their notorious administration by political authority. I have set some of these matters out in a mimeographed publication that I am sending you separately under the title Politics versus Proprietorship. If you are sufficiently interested to look this through, you will observe that I came upon the ideas in question by way of some thirty odd years’ belief in and activity on behalf of the practical proposition of Henry George. I would like very much to have your reaction, after mature consideration, to this general point of view.

     I am not sure whether I left with you a copy of my “Energy Concept of Population,” so I am sending you another to make sure. This is a concept that seems to be particularly attractive to persons who believe in the physical sciences, and gives promise of being an effective instrument of social analysis and development of technique for the social engineer. You will note that this population concept recognizes the necessity of and attempts to supply the necessary quantitative units upon which alone any scientific or engineering technique can be based. I am wondering what you will think of the application of the conception of energy exchange between units of structure, as it is known in the physical sciences, to the phenomena of exchange of services in the social realm.

     I am especially hoping you will observe that my explanation of Private Property in Land is definitely based upon the “Energy Concept of Population.” It gave me much satisfaction to make this functional analysis and explanation of property in land which institution has been so much under controversy from the static point of view.

     This letter is far too long. I only hope I can have the pleasure of seeing you again before very long. In the meantime, believe me

Very sincerely yours,