and various capital existing in society. "The value of a building," he says, "like the value of goods, or of anything properly styled wealth, is produced by individual exertion, and therefore properly belongs to the individual" (3). It is true that most of the wealth of society belongs to the individual; but how much of the wealth of society derives its origin and significance from the individuals who own it? It is hard to see how any single taxer whose attention has been adequately directed upon the facts of history can remain an individualist. Unless we are preoccupied, how can we fail to see that there is rolled up across the centuries an ever increasing mass of capital which is largely formed upon the lines of cleavage? How can we fail to see that the further society advances along the path of progress and of time, the more it comes under bonds to the past, and the less is its capital due to the labor of individuals living at the moment? Mr. George did not notice the social nature of capital; nor did he reckon with cleavage as an element in the capitalization of society. He did not emphasize that the owners of capital have mostly saved it, not out of their own labor, but out of the labor of the lower class. He missed the fact that society is a collectivism developing under the forms of individualism; and he took the current individualistic psychology of society at its face value without going beneath the form to the substance. Mr. George also mingled with his economics inadmissible propositions about "absolute ethics," which must be ignored in order to reach the essence of his work. He was at his strongest when he said nothing about absolute ethics, and confined himself to the contemporary economics of the land problem. He was at his weakest when he trenched upon those profound problems of conduct which have baffled philosophical thinkers far greater than he. When Mr. George was in the ethical frame of mind, he imagined that the future adjustment of the land problem would be based upon grounds of "absolute ethics." Private appropriation of rent for the use of the land, LIFRA UNIVER WESTERN CIVILIZATION — (Continued). 285 which no man has created, thought Mr. George, is absolutely wrong under any and all circumstances. Slavery likewise ought never to have existed. That great social cleavage which is revealed by history ought never to have been found among men. No good comes from it. From the earliest age onward, according to Mr. George, human society ought to have been organized under a democratic, individualistic system wherein every man possessed his inalienable "rights." Mr. George's presentation of the land problem, then, was mixed with much archaic ethical philosophy. He worked in a transition era; and belonged at once to the present and the past. Any future adjustment of the land problem will be based, not upon "absolute ethics," but upon the solid grounds of contemporary expediency where Mr. George was strongest.* The land problem has been so ably treated by Mr. George and others that there is no excuse for going into it here at any length. Ample presentations of it are contained in the works whereof a list will be found in the bibliography at the rear of this book. The brief treatment which follows can do no more than suggest the situation. § 168.- The existing social regime places land in the same category as things produced from the earth's resources by human labor; and attempts to tax land on the assumption that there is no difference between property in the earth and property in things produced from the earth's resources. It is a natural and legitimate result of this system that speculation in unused land is encouraged. As population multiplies and spreads out, the reduction of the soil to private ownership runs ahead of the actual needs of settlement; and presently the society finds itself in the midst of a complete land monopoly. Land being thus treated as an object which may be exchanged for other objects, or sold for a cash price, or leased, or taxed, like any other item of property, it follows that there is a constant pressure to realize from land as *Expediency will secure for men those rights which some philosophers imagine to be inherent and absolute. much rent as possible. The selling price of land is calculated, in the long run, with reference to the rent that can be got for it. In the use of capital in all kinds of enterprize there is, first, a heavy private charge for land; and, second, a heavy public charge by way of taxation. If a capitalist undertakes to erect a dwelling house in a city, and has no suitable building lot, he must rent or purchase appropriate land whereon to build. Building lots, like all other land, vary in price. We will suppose that our capitalist pays $1,500 for a site. Some sites are worth far more, and some far less. On a location commanding $1,500 would be placed a house costing from two to three times as much say $3,500. This would bring the total value of the property up to $5,000. Our capitalist must now pay an annual tax on this total value. We will place the tax rate at 24; and suppose that the property is assessed at two-thirds of its value. This means an annual payment of about $83. Thus, in order to erect a $3,500 house, our capitalist is compelled to pay $1,500 for a site and $83 annual tax in addition. This case illustrates a universal fact. The earth being held as private property, and assessed for taxation on the same basis as property produced from the earth's resources by human labor, all investments of capital must, in the long run, be made to yield ground rent and taxes. § 169. At the same time we must note the effect of systems of taxation which, in harmony with our present regime of property, throw land into the same category with wealth produced from the resources of the land. The testimony of experience is, that such systems bear with greater proportional weight upon agricultural property of all kinds than upon city property, and more heavily upon the smaller holders of all kinds of city property than upon the larger holders. Our study of the history of Israel showed us the crushing out of the smaller land monopolists in the agricultural districts; the concentration of the property of Israel in the hands of the city magnates; and the dramatic protest of the country against the city. The same process of concentration has been coming to pass in western civilization in modern times. It began earlier, and has proceeded further, in Europe than in America; but its progress in America is more rapid with each passing decade. The present system of taxation causes increasing unrest and inquiry. In 1879, the State of California, for instance, adopted a new constitution at the behest of the agricultural classes, under which it was expected that the rustic population would be relieved of its disproportionate tax burdens. But as a matter of course, the new constitution has brought no relief to the class that voted for it. The experience of California is that of all the American and European states. In Ohio, Governor McKinley appointed a commission to investigate the workings of taxation in that state. The commission reported in 1893, showing that the agricultural counties. paid more than the wealthy city counties in proportion to their property. The over-taxation of farmers, and small property owners in general, in country and city, is elaborately demonstrated by the 1894 report of the Illinois. State Bureau of Labor Statistics. The same fact, again, is proved by an investigation summarized in a pamphlet issued in 1897 by the United States Department of Agriculture (Division of Statistics, Circular No. 5). Mayor Johnson, of Cleveland, Ohio, also declares that the smaller property owners pay relatively more than the larger hold ers. In the course of a signed statement issued in 1900 after a careful investigation, he says: "Small shops and homes, including the rented homes of the poorer people, are assessed relatively higher than any other real estate in the city. A great majority of these small properties, valued at less than two thousand dollars, are assessed at more than 60 per cent of their true value, some being actually assessed at more than the owners offer to sell the property for . . The more valuable properties, those assessed at more than $2,000 each, show great variations, and generally the more valuable pieces are assessed at the lowest rates. The rule is almost universal that the valuable properties are assessed low, while the least valuable are assessed high." It is often claimed that this state of things can be remedied by electing honest assessors. But while the evils of a system of state revenue which places land in the same category as other things may be palliated, they can be relieved only by a radical reform of the system itself. § 170. Let us now glance at the upper and lower classes under the present regime. We have seen that from prehistoric times down to the present there has existed a vast lower stratum which has never been a propertied class. At present, throughout western civilization as a whole, the lower class comprises the larger part of the community. It is personally free; but in order to live, and provide for immediate bodily needs, it must apply to the upper class, which owns most of the capital and land of Europe and America. In other words, the members of the lower class must compete with each other for work. A small minority of skilled laborers command high wages; but this has no effect on the general situation. The essential fact lying behind the relations between upper and lower classes in contemporary society has been so well set forth by Professor Small that we quote from a paper by him. "It will possibly be news to many men, who look from the calm heights of professional position upon the struggles of organized wage-earners, that only those children who inherit a title to land or its use are born into a legally protected right to earn a living. Other children may inherit money or equivalent personal property, and so long as it lasts the law will protect them in its use. Then they must apply, with the crowd born without inheritance, to those who possess the land, for the privilege of working in further support of life. A social system which incorporates the assumption that a portion of society may righteously monopolize the productive forces of nature, so that other men must ask the permission of the monopolists to draw on the resources of nature, practically de |