By David Hoggard
The political spectrum is home to many shades of political opinion. One of the shadiest of these, at least as far as public awareness goes, is Georgism – an ideology which has been lambasted for being Communistic and Free-market in equal measures.
Devised in the late 19th century by the American economist Henry George, it was quickly adopted by Liberals such as David Lloyd George, who introduced the Georgist song ‘The Land’ as the new party anthem of the British Liberals. However, with the rise of more simplistic and appealing ideologies, Georgism has become rather obscure under that name, only held to by sects of environmentalists and libertarians.
Nuts and bolts: to be a Georgist, you must believe that all land is the common heritage of mankind upon which all Capital and Labour are built, and that profiting from increases in the value of privately-owned land is therefore immoral. You will therefore want to transfer ownership of that land to the State – while being very sure never to utter the words ‘nationalisation’ or ‘confiscation’ – and rent it back to the previous landowner at the full ground rent. Note that the Land we’re talking about doesn’t include the buildings or personal property that happen to be located on that Land, only the ‘unimproved value’ of said Land: the price listed on the Monopoly board.
After that, we get into abstruse theoretical discussions within the Georgist worldview. Should landowners be compensated for the loss of their land? Should Land Value Tax replace all other taxes, or only some? We could be here all day if we went into these questions from a Georgist perspective – and you’re welcome to discuss them on the discussion page.
It is worth saying at this point that a Land Value Tax, in and of itself, is not particularly out-there as a policy: LVTs are currently part of the tax package in Denmark, Estonia, Pennsylvania and elsewhere. However, these are levied alongside income taxes – which Georgists oppose – and they don’t charge the full ground rent, only a fraction of it.
Although George’s ideas were taken up by Liberals at the turn of the century, he was unfortunate in that this was precisely at the point when the Liberal star began to wane in favour of that of Socialism. As such, bourgeois movements were set up to fight specifically for Georgism: to revitalise the intellectual basis of the broader creed. Commonwealth Land Parties were established in America and the UK (specifically, Stoke-on-Trent), but were not overburdened with success. Nevertheless, both contributed to the development of a general political philosophy beyond the LVT proposal. This was a philosophy of zero taxes other than the Land Rent, which would encourage private enterprise to spend its newly untaxed surpluses on developing every square inch of land (since you paid the same Rent for an unproductive acre as for an equivalent acre with a factory on it) and thereby conquering unemployment.
To find Georgist political parties with noticeable levels of success, we must look first at Australia. There was a Henry George Justice Party run by an electrician from Melbourne in the 1950s, which survives as a non-profit called Prosper Australia. Prosper Australia calls itself ‘Earthsharing Australia’ when reaching out to environmentalist groups. In any case, the HGJP won very few votes in its time, and was overshadowed by the Single Tax League of the previous generation.
Unlike the Henry George Justice Party, the Single Taxers were mainly active in South Australia. Again unlike the HGJP, they won an appreciable number of votes: Edward Craigie, indeed, was elected to the South Australian House of Assembly several times in the 1930s for the extremely rural seat of Flinders. Craigie was renowned as one of the most boring, technical speakers in the House, with his public meetings only livened up when Labor supporters threw fruit at him. Perhaps it was out of revenge for this impolite behaviour that he spitefully refused to support a coalition involving Labor after the hung Parliament of 1938, ensuring that the right-wing party retained power for a generation. Craigie himself did not retain power: he was defeated at the next election, largely because he’d blown the chance to execute parts of his policy platform.
The most successful Georgist group was the Justice Party, represented in the Danish Folketing on and off between 1926 and 1981. Their greatest period of success came after the Second World War, when they furiously attacked the expense of the Social Democrat welfare state and the wisdom of post-war price controls, and thereby attracted laissez-faire voters who weren’t loyal to the Single Tax idea.
This went quite well for them until they joined a Social Democrat-Radikale Venstre Government in 1957. The Justice Party promptly admitted that they didn’t actually believe in their hardcore free-market rhetoric and had mainly been attacking the Social Democrats because it attracted votes. As such, they were soundly defeated at the next election and only returned to the Folketing in the 1970s, having attracted niche support for their environmental credentials, as well as being the only non-Socialist party that opposed EEC/EU membership. After that Indian Summer, the abolition of income tax was adopted as a policy by the right-wing Progress Party, and the new Alternative party proposed a broadly identical Land Rent tax system in 2016.
Going back to their late-1950s time in Government, the Justice Party failed to convince their partners of the merits of full-on Georgism, but did make changes to the existing LVT which resulted in a decrease in land speculation, low inflation and near-zero unemployment. Unfortunately, their entire world-view predicted a decrease in land prices which did not, in fact, eventuate. This damaged their credibility somewhat. And then the coalition fell short of their goal of managing to survive solely on Land Tax (being forced to call in income tax in the second year) thus creating a feeling that the Land Tax would just end up being an imposition on top of an already extensive tax bill. Ideological Georgism’s brief record in Government has been mixed.
How about the potential of Georgism as an Alternate History ideology of muscular Liberalism, taking the fight to the Established landowners on the one side and the high-tax Socialists on the other?
Gallup ran a poll in Denmark in 1962, asking their sample whether they favoured a Georgist Land Tax. This was a country in which a Georgist party had been in the legislature for over thirty years, and in which there had been a Land Tax for even longer. As such, the poll recorded a stonking result of 71%... for Don’t Know. The issue doesn’t seem to grab the public’s attention.