I have put off delving into this side of the Gesellian perspective, but I realize it really needs to be addressed if we are to conduct a thorough examination of Gesell’s theories and proposals.
"...extorted by the dagger, or procured through fraud..." Yes, how the land was made private in the first place is an important part of the campaign. When that happened we were all robbed and the ancient concept of usufruct was crushed under the boot of usury. But I think if the money part can put the public back into public policy then the land part can be more effectively pursued. Our environmental circumstances behoove us to get many more farmers back on the land to grow soil, nutrient dense food, fiber and trees. Our social circumstances behoove us to assure economic empowerment of women which is part of the land issue. Under the current system of usury we can hardly get the conversation started.
Agreed. Usury is such an important concept. As you surely know, Judaism, Christianity and Islam all originally prohibited usury. This is highly significant, in my opinion. It is also interesting to note that the definition of the word usury has changed significantly over the years. For example, Aristotle considered speculation a form of usury (although he didn't use that word). Most people would not consider speculative profits to be a form of usury, but I think Gesell's analysis shows that they are actually a different manifestation of the same root cause that gives rise to interest (which is how most people currently define the word). I think we need to go back to a more expansive definition of the word usury. At some point in the future I intend to write an article specifically on this subject.
The definition I use for usury is "the abuse of monetary authority for personal gain." I think that encompasses the speculative economy.
Dante condemned usurers to the lowest level of hell and regarded it as “… an extraordinarily efficient form of violence by which one does the most damage with the least effort.”
Agreed. That's a better definition. But that's not the definition most people would give these days. Your definition is consistent with Gesell and Aristotle.
This article is not about usuary per se, but about our rights to natural resources including the land. It is immediately clear that when access rights to useful sites of land are withheld, that some landless persons are dependent on the land managers (or owners) for employment and in making a living. Since this opportunity is not fairly shared, the poverty that results is thought to be a responsibility of the community, but it really is due to the way land is allowed to be owned by individuals.
The value of the land has been found to depend on the local population density as well as certain aspects of the local surroundings. As more people come to occupy a region and the tax money is partly used by governments to improve the infrastructure, so too does the land's usefulness grow and its value increase. There would be no sense in building a cassino in the middle of a desert, unless access to it was at least as easy as if the cassino were placed in the middle of town. Tall buildings go with high utility of useful sites.
Without this natural form of wealth being shared in a socially just way there will always be discontented people whose income is small or non-existent and the need for political organizations to represent their various viewpoints and land utility groups and organizations promoting both sides of the situation become necessary.
The benefit from what can be produced by a site that is properly used consists of 3 kinds of returns which are wages (for the labor needed), interest (or dividend) for tools, buildings, transports etc. (that is to say durable capital goods) and rent for direct occupation and use of the land. Land owners can get rich from this rent without doing a stroke of work whilst capitalists who own the durables have to maintain them and replace them when the become obsolete. The land does not have this property although it is possible to improve its fertility by adding material to it and of course by providing improved access to it.
Were the land access rights and their benefits fairly shared there would be less differences between these two classes of persons that result from this above described situation. Were all land owners to return to the nation their rent, so that everyone would then be able to benefit from the elimination of every kind of taxation that currently burdens the community as a whole, then there would be a greater demand for produce along with more land being properly used to provide for this need and a greater rate of progress to more prosperity. TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!
Thanks so much for your comment, David! I agree with every word of it... except the last sentence. One of the primary differences between Silvio Gesell and Henry George has to do with their proposed solution to the problems that you eloquently described. Henry George advocated a land tax. Silvio Gesell said that a land tax is not adequate to really solve the problem. According to Gesell, the only true solution is to nationalize all land and to then allocate land use via public auction of leases, with the revenue from those leases going into the public treasury. (It should be noted that rental revenue from land would potentially be a large enough source of public revenue to make all other forms of taxation unnecessary.) This is a very important subject and deserves a separate discussion. I plan to write an article comparing and contrasting Silvio Gesell and Henry George in the future. Thanks again for reading and commenting!
Hi Josh, thanks for your kind remarks about what I wrote. I should add that the idea of leasing nationally owned land is one that I had too. So here is my poem about it, which is based on the Georgist recognition of so called "seeing the cat", because one you have seen it, then every time you gaze at a certain cartoon of a hidden cat in a tree, you immediately find it!
A MORE STEALTHY GEORGIST CAT
The Georgist cat is small and lean
And often doesn’t get to be seen.
It hides in the branches of an economic’s-tree
So it takes a long while for you or for me,
To appreciate its cute and original form
That the landlords are so ready to scorn.
The economic’s-tree has many fine branches
(On which we contend, there are no free-lunches).
Whilst the land-owning rich in the city all claim
As bloated capitalists, that they’re not to blame
For the gap that lays ‘twixt the poor and the wealthy,
But oppose any tax to make our nation healthy.
Have you heard the tale of a committee, that
Thought to bell and get warning of a fat cat?
But could not find a soul to apply this device,
Because typically all were a council of mice!
Our Georgist cat has a bell ready-fitted,
(Which makes this analogy more to be pitted).
This warning sound makes our ideals unwanted,
For a new tax is how politicians get doubted.
So the Georgist cat fails to catch any mice
That pose as landlords, along with their vice.
But how shall we silence the bell’s warning sound
And quieten the news that our pussy’s around?
Our Georgist feline is in serious error,
‘Cause its bell draws attention not only to whether
Valuable sites can be ethically shared,
But also the rent from a site is declared
As the means to replace other kinds of taxation,
Which obviously causes the landlords vexation.
In the economic’s tree many other beasts lurk
But are missed, after learning of Henry G’s quirk
Through the cat-finder’s recently brilliant discovery.
This writer seeks a new means for recovery
From our politi-unacceptable claim,
And stealthily project LVT once again.
If we would but examine some more of the tree
Alternatives are waiting there for us to see.
Among them is hiding a far better way
For an equivalent LVT effect, to stay
In essence, without causing such evil offences
To the landlords and their partitioning fences.
When a property-owner decides to sell--quick
The gov’ment buys its land, and not the public!
Its occupant then leases it for a similar fee
To the One-Tax of Henry George’s decree.
Any buildings on-site should be sold as previously
But without the land, on which the price grievously
Had risen, with huge speculation in its advance
That stopped entrepreneurs from having a chance.
The cost of this land must be raised through new bonds
Which the government sells and the public responds,
‘Though their interest-rate’s a bit lower than rent,
Their returns are more stable than the average tenant!
This process will take many years to complete--
So its financial support is no great money feat.
After the lease-fees begin to collect,
Gov’ments can tax less, and firmly expect
To pursue this policy without change, until
All the lease-fees are site-rents in the Gov’ment’s till.
With the land properly shared, the government sees
That site development stays with the current leasees.
Other taxes that cause so much trouble and hate
Are scrapped, with great pleasure to all in the state,
Except for some bankers and the tax collectors
Whose actions no longer apply in these sectors.
Land-rights will be shared through this simple device,
Love it! And you are essentially describing Gesell's proposal to a T. Gesell does not want to expropriate existing landowners. He proposes that the government buys all land at current market prices and pays for it by issuing government bonds (the interest/principal payments of which would be financed by the revenue generated by leasing the land). This would result in the government owning all of the land free & clear in 20-30 years (depending, obviously, on the duration of the bonds).
As a rather random question, wonder what to think about Solon's reform (ancient Greece) in the light of Gesell...
The reform consisted in giving land to the citizens and dividing them into 5 classes based on how much they owned. In antiquity, owning land seems to be a prerequisite for political freedom. You lose your piece of land, you lose your freedom (and, of course, slaves owned no land).
I don't really see what there is to be said about this from a Gesellian perspective. Gesell opposes private land ownership. What you're describing is a system of private land ownership, so Gesell would be against it.
But does Gesell refer to any historical precedent to what he proposes?
-
For instance, as you mention, Aristotle opposes interest (so corresponds to Gesell) but he also opposes Plato's "community" ideas and is in favour of private ownership.
mean, what is the ultimate goal of the Gesellian society if not freedom? And it strikes me that the views on what makes you free are so opposed – for the Greeks, property is not a goal per se (like for Locke) but merely a precondition to freedom.
Gesell's argument in favour of no land property seems to be mobility. You are not attached to the land so you can move whenever you feel like it.
But there are "sedentary" ethics which put emphasis on the love for your place. They want to die on their land, as it were. Would such ethics make Gesell redundant or would he have a response?
I don't see any inherent conflict between Gesell's perspective and what you're describing. Gesell is 100% in favor of individual freedom. He believes in free enterprise, private property and democracy. However he believes that the basis of the principle of private property is human labor -- i.e. if you made it, it's yours. But no one made land. It existed before man. Therefore no one can make a legitimate claim to ownership of land on the basis which makes other things private property. So upon what basis can ownership of land be justified? Gesell believes the only way land can become private property is through violence, force and/or theft. As such, opposing private ownership of land is in no way inconsistent with supporting other forms of private property.
Lastly, I would not agree that Gesell's primary reason for opposing land ownership is because he values mobility. Rather, I would say that the reason he believes no one should be able to own land individually is because it belongs to all of us, as well as to future generations. Allowing land to be sold is allowing people to sell something that does not legitimately belong to them. It's like selling a stolen car. My uncle once unknowingly bought a stolen car. He didn't get to keep it (and he didn't get his money back).
If all land is "nationalised", would it not mean that simply it has one owner instead of many, namely, the state? And you must pay rent to the state, the true owner. If is truly nobody's property, then why pay rent? You don't pay rent for air.
In "The Case for Nationalisation of Land" Gesell writes:
The transfer tax in many parts of Germany amounts to 1 - 2 - 3%, and in Alsace to as much as 5%. If we consider that landed property is in most cases mortgaged up to three-quarters of its value, we can understand the seriousness of this obstacle; the transfer tax claims one-fifth of the sum received by the seller, one-fifth of the buyer's capital. So if a man changes his abode five times - which is not too often for his proper development - his whole fortune is absorbed in taxes. And the unearned increment tax advocated by the land reformers, which is collected only on transfer, makes matters still worse
These are details from his time and place. I wonder how that is relevant today? How does it compare to present day situation in practical terms?
I haven't studied the matter. I would assume it varies greatly by country. But on the whole I would imagine the same logic applies. For instance, I live in Peru, where the transfer tax that is due when buying real estate is 3% (right in the same range as Gesell discussed). So if someone borrows 90% of the property value to buy a place, the tax amounts to almost a third of the buyer's equity.
In very simple elementary terms. I wonder how this affects an ordinary person.
Say, a person owns an apartment in a block of flats. Technically, the land on which the block is built, I think, belongs to the state but in practical terms it makes no difference to him, he just lives in the apartment and has walks around the neighbourhood. He has a regular job with a regular salary. He pays for the heating, electricity etc. with it.
Where does the land issue come into the equation for him at all?
The difference is what happens when he sells the apartment. If he owns it he will in many cases receive a large profit that he did nothing to earn. I, for example, own a small house in Knoxville, TN that is worth at least 3 times what I paid for it. (I bought it in 2008.) If/when I sell it and put that extra money in my pocket, where did that money come from? I certainly didn't do anything to earn it. So obviously in some way I am receiving wealth that somebody else generated.
The unofficial motto of The Silvio Gesell Foundation is: "If you receive income without generating wealth, someone else is creating wealth without receiving income."
I thought he doesn't own the land on which it is built. But the apartment is also not his? So who would build it, take care of it, restore it and so on? And why if it's not his?
I've started reading the book and there's a lot about free land, how ability to move away to free land and start afresh influences wages etc.
It seems a lot of emphasis is based on farming. But in modern economy most people don't engage in farming, it's kinda left outside of equation. Most just get the food and forget about it...
"...extorted by the dagger, or procured through fraud..." Yes, how the land was made private in the first place is an important part of the campaign. When that happened we were all robbed and the ancient concept of usufruct was crushed under the boot of usury. But I think if the money part can put the public back into public policy then the land part can be more effectively pursued. Our environmental circumstances behoove us to get many more farmers back on the land to grow soil, nutrient dense food, fiber and trees. Our social circumstances behoove us to assure economic empowerment of women which is part of the land issue. Under the current system of usury we can hardly get the conversation started.
Agreed. Usury is such an important concept. As you surely know, Judaism, Christianity and Islam all originally prohibited usury. This is highly significant, in my opinion. It is also interesting to note that the definition of the word usury has changed significantly over the years. For example, Aristotle considered speculation a form of usury (although he didn't use that word). Most people would not consider speculative profits to be a form of usury, but I think Gesell's analysis shows that they are actually a different manifestation of the same root cause that gives rise to interest (which is how most people currently define the word). I think we need to go back to a more expansive definition of the word usury. At some point in the future I intend to write an article specifically on this subject.
The definition I use for usury is "the abuse of monetary authority for personal gain." I think that encompasses the speculative economy.
Dante condemned usurers to the lowest level of hell and regarded it as “… an extraordinarily efficient form of violence by which one does the most damage with the least effort.”
Agreed. That's a better definition. But that's not the definition most people would give these days. Your definition is consistent with Gesell and Aristotle.
This article is not about usuary per se, but about our rights to natural resources including the land. It is immediately clear that when access rights to useful sites of land are withheld, that some landless persons are dependent on the land managers (or owners) for employment and in making a living. Since this opportunity is not fairly shared, the poverty that results is thought to be a responsibility of the community, but it really is due to the way land is allowed to be owned by individuals.
The value of the land has been found to depend on the local population density as well as certain aspects of the local surroundings. As more people come to occupy a region and the tax money is partly used by governments to improve the infrastructure, so too does the land's usefulness grow and its value increase. There would be no sense in building a cassino in the middle of a desert, unless access to it was at least as easy as if the cassino were placed in the middle of town. Tall buildings go with high utility of useful sites.
Without this natural form of wealth being shared in a socially just way there will always be discontented people whose income is small or non-existent and the need for political organizations to represent their various viewpoints and land utility groups and organizations promoting both sides of the situation become necessary.
The benefit from what can be produced by a site that is properly used consists of 3 kinds of returns which are wages (for the labor needed), interest (or dividend) for tools, buildings, transports etc. (that is to say durable capital goods) and rent for direct occupation and use of the land. Land owners can get rich from this rent without doing a stroke of work whilst capitalists who own the durables have to maintain them and replace them when the become obsolete. The land does not have this property although it is possible to improve its fertility by adding material to it and of course by providing improved access to it.
Were the land access rights and their benefits fairly shared there would be less differences between these two classes of persons that result from this above described situation. Were all land owners to return to the nation their rent, so that everyone would then be able to benefit from the elimination of every kind of taxation that currently burdens the community as a whole, then there would be a greater demand for produce along with more land being properly used to provide for this need and a greater rate of progress to more prosperity. TAX LAND NOT PEOPLE; TAX TAKINGS NOT MAKINGS!
Thanks so much for your comment, David! I agree with every word of it... except the last sentence. One of the primary differences between Silvio Gesell and Henry George has to do with their proposed solution to the problems that you eloquently described. Henry George advocated a land tax. Silvio Gesell said that a land tax is not adequate to really solve the problem. According to Gesell, the only true solution is to nationalize all land and to then allocate land use via public auction of leases, with the revenue from those leases going into the public treasury. (It should be noted that rental revenue from land would potentially be a large enough source of public revenue to make all other forms of taxation unnecessary.) This is a very important subject and deserves a separate discussion. I plan to write an article comparing and contrasting Silvio Gesell and Henry George in the future. Thanks again for reading and commenting!
Hi Josh, thanks for your kind remarks about what I wrote. I should add that the idea of leasing nationally owned land is one that I had too. So here is my poem about it, which is based on the Georgist recognition of so called "seeing the cat", because one you have seen it, then every time you gaze at a certain cartoon of a hidden cat in a tree, you immediately find it!
A MORE STEALTHY GEORGIST CAT
The Georgist cat is small and lean
And often doesn’t get to be seen.
It hides in the branches of an economic’s-tree
So it takes a long while for you or for me,
To appreciate its cute and original form
That the landlords are so ready to scorn.
The economic’s-tree has many fine branches
(On which we contend, there are no free-lunches).
Whilst the land-owning rich in the city all claim
As bloated capitalists, that they’re not to blame
For the gap that lays ‘twixt the poor and the wealthy,
But oppose any tax to make our nation healthy.
Have you heard the tale of a committee, that
Thought to bell and get warning of a fat cat?
But could not find a soul to apply this device,
Because typically all were a council of mice!
Our Georgist cat has a bell ready-fitted,
(Which makes this analogy more to be pitted).
This warning sound makes our ideals unwanted,
For a new tax is how politicians get doubted.
So the Georgist cat fails to catch any mice
That pose as landlords, along with their vice.
But how shall we silence the bell’s warning sound
And quieten the news that our pussy’s around?
Our Georgist feline is in serious error,
‘Cause its bell draws attention not only to whether
Valuable sites can be ethically shared,
But also the rent from a site is declared
As the means to replace other kinds of taxation,
Which obviously causes the landlords vexation.
In the economic’s tree many other beasts lurk
But are missed, after learning of Henry G’s quirk
Through the cat-finder’s recently brilliant discovery.
This writer seeks a new means for recovery
From our politi-unacceptable claim,
And stealthily project LVT once again.
If we would but examine some more of the tree
Alternatives are waiting there for us to see.
Among them is hiding a far better way
For an equivalent LVT effect, to stay
In essence, without causing such evil offences
To the landlords and their partitioning fences.
When a property-owner decides to sell--quick
The gov’ment buys its land, and not the public!
Its occupant then leases it for a similar fee
To the One-Tax of Henry George’s decree.
Any buildings on-site should be sold as previously
But without the land, on which the price grievously
Had risen, with huge speculation in its advance
That stopped entrepreneurs from having a chance.
The cost of this land must be raised through new bonds
Which the government sells and the public responds,
‘Though their interest-rate’s a bit lower than rent,
Their returns are more stable than the average tenant!
This process will take many years to complete--
So its financial support is no great money feat.
After the lease-fees begin to collect,
Gov’ments can tax less, and firmly expect
To pursue this policy without change, until
All the lease-fees are site-rents in the Gov’ment’s till.
With the land properly shared, the government sees
That site development stays with the current leasees.
Other taxes that cause so much trouble and hate
Are scrapped, with great pleasure to all in the state,
Except for some bankers and the tax collectors
Whose actions no longer apply in these sectors.
Land-rights will be shared through this simple device,
By a fast-growing country that takes our advice.
Love it! And you are essentially describing Gesell's proposal to a T. Gesell does not want to expropriate existing landowners. He proposes that the government buys all land at current market prices and pays for it by issuing government bonds (the interest/principal payments of which would be financed by the revenue generated by leasing the land). This would result in the government owning all of the land free & clear in 20-30 years (depending, obviously, on the duration of the bonds).
I wrote this poem in 2019. When did Gesell's proposal begin?
Gesell's book was published in 1916. He got there slightly before you did. Hahaha!
As a rather random question, wonder what to think about Solon's reform (ancient Greece) in the light of Gesell...
The reform consisted in giving land to the citizens and dividing them into 5 classes based on how much they owned. In antiquity, owning land seems to be a prerequisite for political freedom. You lose your piece of land, you lose your freedom (and, of course, slaves owned no land).
I don't really see what there is to be said about this from a Gesellian perspective. Gesell opposes private land ownership. What you're describing is a system of private land ownership, so Gesell would be against it.
But does Gesell refer to any historical precedent to what he proposes?
-
For instance, as you mention, Aristotle opposes interest (so corresponds to Gesell) but he also opposes Plato's "community" ideas and is in favour of private ownership.
mean, what is the ultimate goal of the Gesellian society if not freedom? And it strikes me that the views on what makes you free are so opposed – for the Greeks, property is not a goal per se (like for Locke) but merely a precondition to freedom.
Gesell's argument in favour of no land property seems to be mobility. You are not attached to the land so you can move whenever you feel like it.
But there are "sedentary" ethics which put emphasis on the love for your place. They want to die on their land, as it were. Would such ethics make Gesell redundant or would he have a response?
I don't see any inherent conflict between Gesell's perspective and what you're describing. Gesell is 100% in favor of individual freedom. He believes in free enterprise, private property and democracy. However he believes that the basis of the principle of private property is human labor -- i.e. if you made it, it's yours. But no one made land. It existed before man. Therefore no one can make a legitimate claim to ownership of land on the basis which makes other things private property. So upon what basis can ownership of land be justified? Gesell believes the only way land can become private property is through violence, force and/or theft. As such, opposing private ownership of land is in no way inconsistent with supporting other forms of private property.
Lastly, I would not agree that Gesell's primary reason for opposing land ownership is because he values mobility. Rather, I would say that the reason he believes no one should be able to own land individually is because it belongs to all of us, as well as to future generations. Allowing land to be sold is allowing people to sell something that does not legitimately belong to them. It's like selling a stolen car. My uncle once unknowingly bought a stolen car. He didn't get to keep it (and he didn't get his money back).
If all land is "nationalised", would it not mean that simply it has one owner instead of many, namely, the state? And you must pay rent to the state, the true owner. If is truly nobody's property, then why pay rent? You don't pay rent for air.
*Plato's "communist" ideas.
In "The Case for Nationalisation of Land" Gesell writes:
The transfer tax in many parts of Germany amounts to 1 - 2 - 3%, and in Alsace to as much as 5%. If we consider that landed property is in most cases mortgaged up to three-quarters of its value, we can understand the seriousness of this obstacle; the transfer tax claims one-fifth of the sum received by the seller, one-fifth of the buyer's capital. So if a man changes his abode five times - which is not too often for his proper development - his whole fortune is absorbed in taxes. And the unearned increment tax advocated by the land reformers, which is collected only on transfer, makes matters still worse
These are details from his time and place. I wonder how that is relevant today? How does it compare to present day situation in practical terms?
I haven't studied the matter. I would assume it varies greatly by country. But on the whole I would imagine the same logic applies. For instance, I live in Peru, where the transfer tax that is due when buying real estate is 3% (right in the same range as Gesell discussed). So if someone borrows 90% of the property value to buy a place, the tax amounts to almost a third of the buyer's equity.
In very simple elementary terms. I wonder how this affects an ordinary person.
Say, a person owns an apartment in a block of flats. Technically, the land on which the block is built, I think, belongs to the state but in practical terms it makes no difference to him, he just lives in the apartment and has walks around the neighbourhood. He has a regular job with a regular salary. He pays for the heating, electricity etc. with it.
Where does the land issue come into the equation for him at all?
The difference is what happens when he sells the apartment. If he owns it he will in many cases receive a large profit that he did nothing to earn. I, for example, own a small house in Knoxville, TN that is worth at least 3 times what I paid for it. (I bought it in 2008.) If/when I sell it and put that extra money in my pocket, where did that money come from? I certainly didn't do anything to earn it. So obviously in some way I am receiving wealth that somebody else generated.
The unofficial motto of The Silvio Gesell Foundation is: "If you receive income without generating wealth, someone else is creating wealth without receiving income."
So in Gesellian system what would happen when he sells the apartment? It would have the exact same price as when he bought it?
He wouldn't sell the apartment. Because he never would have owned the apartment.
I thought he doesn't own the land on which it is built. But the apartment is also not his? So who would build it, take care of it, restore it and so on? And why if it's not his?
I've started reading the book and there's a lot about free land, how ability to move away to free land and start afresh influences wages etc.
It seems a lot of emphasis is based on farming. But in modern economy most people don't engage in farming, it's kinda left outside of equation. Most just get the food and forget about it...