Economics

A basic political practice for Liberalism is Land Value Taxation (LVT for short) which today secures the basic right for every human to have free (or cheapest) access to land and the collection of the natural income for the government. For many Henry George enunciated and promoted this idea in the second half of the 19th century. He was not the first, since the French Pysiocrats and then Thomas Paine had proposed this measure in the 18th century. There were other formulations much earlier, the most ancient one being that of the Vedic Tradition in Ancient India. But, certainly, in recent times Henry George first described it most fully and clearly, as the extracts show.

Time was when all men believed that the earth was flat. It would be difficult now to trace all the errors into which this assumption led the thinking of those days, or to ascertain how many practical comforts and advantages which we now enjoy would have been missed had not this conceit been exploded. The first serious challenge to this theory raised a storm of abuse which came not merely from the vulgar and superstitious but from the leaders of science and religion. It was a grave shock to human vanity to be told that the natural universe did not revolve round the planet which man occupied, that, on the con­trary, the earth was one of many satellites of a greater sun and that, consequently, there was no solid reason to believe that man was the king of creation.

The right of the individual to his full and proper wages cannot be seriously questioned. To enable him to secure it two things are essential, firstly he must have access to land, and secondly he must have security of tenure so that he may lay his plans ahead and enjoy the fruits of his effort.
At the same time, if the rights of his fellows are to be secured every landholder must duly pay the full rent of his land into the public fund and must maintain his land in good condition. Subject to these conditions he should have the right of access to any free land, and once he takes possession he should have security in the holding. This does not mean, of course, that every man will have five acres and a cow. In many occupations men require but little land. For very many a desk in an office or a bench in a factory is the total individual requirement. How much land is needed depends entirely on the nature of the industry.

Economic theorists hold, with reasonable consistency, that the essence of a tax is the absence of a direct quid pro quo between the taxpayer and the public authority. It is this that distinguishes a tax from other charges that may be imposed by a public authority. A useful definition is provided by Hugh Dalton: ‘a tax is a compulsory contribution imposed by a public authority, irrespective of the exact amount of service rendered to the taxpayer in return, and not imposed as a penalty for any legal offence’. This definition is not a classification of individual taxes and does not rest on the shifting sands of what, for one purpose or another, is from time to time ‘always called taxes’ or ‘never called taxes’.ns.

In this essay an attempt is made to show that the main elements of a free economy, which Adam Smith enunciated in his Wealth of Nations, had already been formulated by Plato 21 centuries earlier.