Georgism

Henry George popularized the concept of gaining public revenues mainly from land and natural resource privileges with his first book, Progress and Poverty (1879).

[11] Economists from Adam Smith and David Ricardo to Milton Friedman and Joseph Stiglitz have observed that a public levy on land value does not cause economic inefficiency, unlike other taxes.

Early devotees of George's economic philosophy were often termed Single Taxers for their political goal of raising public revenue mainly or only from a land-value tax, although Georgists endorsed multiple forms of rent capture (e.g. seigniorage) as legitimate.

[21] Applying this method, he concluded that many of the problems that beset society, such as poverty, inequality, and economic booms and busts, could be attributed to the private ownership of the necessary resource: land rent.

More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expense.

A high land value tax would discourage speculators from holding valuable natural opportunities (like urban real estate) unused or only partially used.

Henry George claimed this would have many benefits, including the reduction or elimination of tax burdens from poorer neighborhoods and agricultural districts; the elimination of a multiplicity of taxes and expensive obsolete government institutions; the elimination of corruption, fraud, and evasion with respect to the collection of taxes; the enablement of true free trade; the destruction of monopolies; the elevation of wages to the full value of labor; the transformation of labor-saving inventions into blessings for all; and the equitable distribution of comfort, leisure, and other advantages that are made possible by an advancing civilization.

[16] Income flow resulting from payments for restricted access to natural opportunities or for contrived privileges over geographic regions is termed economic rent.

Georgists argue that economic rent of land, legal privileges, and natural monopolies should accrue to the community, rather than private owners.

George explicitly included climate, soil, waterways, mineral deposits, laws/forces of nature, public ways, forests, oceans, air, and solar energy in the category of land.

[35][36] Henry George shared the goal of modern Georgists to socialize or dismantle rent from all forms of land monopoly and legal privilege.

However, George emphasized mainly his preferred policy known as land value tax, which targeted a particular form of unearned income known as ground rent.

[37] George predicted that over time technological advancements would increase the frequency and importance of lesser monopolies, yet he expected that ground rent would remain dominant.

[40][41][42] Where free competition is impossible, such as telegraphs, water, gas, and transportation, George wrote, "[S]uch business becomes a proper social function, which should be controlled and managed by and for the whole people concerned."

[32] The early conservationism of the Progressive Era was inspired partly by Henry George, and his influence extended for decades afterward.

Ecological economists might price pollution fines more conservatively to prevent inherently unquantifiable damage to the environment, whereas Georgists might emphasize mediation between conflicting interests and human rights.

[61] Since ecologists are primarily concerned with conservation, they tend to emphasize less the issue of equitably distributing scarcity/pollution rents, whereas Georgists insist that unearned income not accrue to those who hold title to natural assets and pollution privilege.

To the extent that ecological economists share the geoist view of social justice, they would advocate auctioning pollution quotas instead of giving them away for free.

[62][63] The revenue can allow the reduction or elimination of taxes, greater public investment/spending, or the direct distribution of funds to citizens as a pension or basic income/citizen's dividend.

Today, this relatively conservative adaptation is usually considered incompatible with true geolibertarianism, which requires that excess rents be gathered and then distributed back to residents.

[89] This quashed efforts in several other Texas cities towards implementing the Houston Plan: Beaumont, Corpus Christi, Galveston, San Antonio, and Waco.

[98] Founded during the Great Depression in 1932, the Henry George School of Social Science in New York offers courses, sponsors seminars, and publishes research in the Georgist paradigm.

[102] The economist Alfred Marshall believed that George's views in Progress and Poverty were dangerous, even predicting wars, terror, and economic destruction from the immediate implementation of its recommendations.

[105] Marx argued that, "The whole thing is ... simply an attempt, decked out with socialism, to save capitalist domination and indeed to establish it afresh on an even wider basis than its present one.

"[106] Richard T. Ely agreed with the economic arguments for Georgism but believed that correcting the problem the way Henry George wanted, without compensation, was unjust to existing landowners.

Solow stated that taxing away expected land rents "would have no semblance of fairness"; however, Georgism would be good to introduce where location values were not already privatized or if the transition could be phased in slowly.

[111] George has also been accused of exaggerating the importance of his "all-devouring rent thesis" in claiming that it is the primary cause of poverty and injustice in society.

Joseph Schumpeter concluded his analysis of Georgism by stating that, "It is not economically unsound, except that it involves an unwarranted optimism concerning the yield of such a tax."

[115][116][117][118][119][120][121] Anarcho-capitalist political philosopher and economist Murray Rothbard criticized Georgism in Man, Economy, and State as being philosophically incongruent with subjective value theory, and further stating that land is irrelevant in the factors of production, trade, and price systems,[122] but this critique is seen by some, including other opponents of Georgism, as relying on false assumptions and flawed reasoning.

[123] Austrian economist Friedrich Hayek credited early enthusiasm for Henry George with developing his interest in economics.