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The Pamphlet Collection of Sir Robert Stout: Volume 71

Chapter XXIV. — The Resulting "Increase" of General Incomes, Employment, Production, and Savings; the Improved Opportunity for Self-Employment

Chapter XXIV.

The Resulting "Increase" of General Incomes, Employment, Production, and Savings; the Improved Opportunity for Self-Employment.

The landless class forms by far the most numerous section of the people, and includes all tenants, whether of farms, or shops, or dwellings, all who receive salaries or wages, and all who would like to, but don't receive them. It includes many who feel themselves possessed of powers of body and mind which would enable them to employ them-selves rather than ask work and subsistence from others, but are vet so hedged round that they are never able to attain their commendable ambition.

To these, the Single Tax would be wholly a gain. Not that it would give them anything for which they did not work; for this would he a wrong to someone else. Its early effects would be felt by a gradual reduction of the taxes and rates which they would be called upon page 52 to pay. This would be equivalent to a gradual increase of their incomes. It would he the first step in the direction of gradually restoring to them their share of the common use of the ground rent which they had helped to create, but from which they had received no benefit. The Single Tax would collect it to he used for the good of all, in providing for the public needs of the whole community.

But it has been shown that a change more important still, to the landless man would follow. The destruction of the selling Value of land would make it equally accessible to all who wished to use it. There being nothing to pay to secure the possession of land for the purpose of using it, the man of small means would be placed on a par with the capitalist, and could elect to employ himself instead of asking for work. Here would be the legitimate opportunity for one who was qualified, or who felt the desire to try, to step out of the ranks of wage-earners, and to employ himself. Now he has to pay down a premium in the shape of purchase money, to induce someone to stand aside.

Single Taxers are confident that this change in the incidence of taxation, and the consequent killing of selling value, would give a most powerful impetus to the improvement of every class of property. It would be equivalent to serving a notice upon all who saved anything, that for the future they must invest it all in improvements or in useful enterprises. Every natural and prudent instinct would, moreover, tend to the observance of this notice, and not as they do with so many of our highly artificial regulations respecting land—to its evasion. This change of investment would, first of all, afford more employment and better wages, and would increase the production, profits, and savings, of every farm or factory which had been so developed. This would correct the lack of purchasing power amongst the many, which now causes sluggishness in production and distribution.

Then, again, the ground rent, which is abstracted from the community through the medium of land users, is expended by the landlords in luxurious living, which involves the withdrawal of men from useful work in order that they may perform personal and often menial services. This has introduced a false and ostentatious style of living, which the more successful men of business are too apt to imitate, and which many, with less means again, follow at a greater distance. Part of that which is saved by landlords is generally invested in purchasing more land, and therefore in extending the evil which exists, by taking up more ground rent, and by retarding production over a larger area. Part is also invested in creating companies or syndicates, which obtain, by their superior power of competition, practical monopolies in other departments, or else draw industrious people on to the ice by offers of loans. All these forms of the use of capital contain large elements of injury—and even of danger-to the community.

These are not small matters. Financially they are important, but socially they would be even more far-reaching in their results. They would, as has been shown, enable the more capable and thrifty of the page 53 wage-earners—whether they worked by hand or brain—to step out of the ranks and cease to compete for wages. Nay, not merely to cease to compete for wages, but to swell the ranks of the employers who compete for service. There would thus be opened out a constant possibility of selection between various employments and pursuits as their expansion or contraction—or the tastes of the rising generation—caused them to be desired. The question now anxiously asked, "What shall we do with our boys?" would no longer fail in getting a satisfactory answer.

But these are not the only possibilities to be secured by the reform. The speculator and landlord having disappeared, there would be no class left to be supported in idleness by the workers. All would then live by industry, and none be left to despise it. The true "dignity of labour" would then be acknowledged as a reality. Now it is obscured by the shallow fancy that those who do least are the happiest, and that they are ennobled and raised above their fellows by such abstinence. The chief observable peculiarity in the position of the so-called nobility of the day is that they are people who are supported in idleness by the contributions of a number of their fellows who are, poorer than themselves. The future test of nobility may come to be due to the fact that a man supports himself and devotes part of his leisure to the public good, while scorning to use his position or influence for the furtherance of his own and his friends interests at other people's expense?.

Under the new system trades unionists would not need to bind themselves together in hostility to free labourers, nor to stipulate for the exclusion from their respective trades of numbers of their own sons and those of their mates. The burning question of the hours of labour, as well as that of the sanitary condition of workshops, would solve themselves by the increased chances afforded to the workers of self-employment.

It will be desirable to say a little more as to the comparative advantages of self-employment and of working for wages in the Single Tax era. It may be thought by some, owing to the frequency with which these have been contrasted, that Single Taxers believe that everyone would decline to work for another, and would enjoy a much more desirable status in self-employment. But this is not the correct inference. It would be rather this: that Single Taxers see that those who now work for others lie under considerable disabilities, and they expect that the reform will remove some of these, and render the two conditions for the future equally desirable. If this proved to be so, then the choice would simply be one of individual preference, just as a man now prefers a certain trade or profession to all others. "Freedom of contract" is one of the sophisms much paraded in these days, but it is one of the conditions which cannot now exist as far as the wage-earners are concerned. The fact is that there is no alternative open to most of them but to take what wages are offered in their page 54 line of business or to go without. Now, to go without would mean, in most cases, to starve, and that can hardly be considered an alternative, bringing with it the blessing of "freedom of contract." A valuable and welcome alternative would be that which is predicted as a result of the Single Tax, viz., a chance of employing themselves. That does-not exist now, and it never will so long as land for use is unobtainable, except upon payment of a premium in advance, or upon the annual payment of rent, besides rates and taxes. It is only a man with capital who can do either, and very few wage-earners can ever save enough to attain to such an alternative. What is unattainable, by the seekers has practically no existence as far as they are concerned, except in so far as it exists merely to tantalise them.

The wage-earner of the present suffers under three disabilities:—
1.He pays his share of taxes and rates.
2.He helps to create the ground-rent fund; and
3.From the fact that this fund goes into private hands, instead of being treated as public revenue, arises the "selling value" of land, which forms the barrier which cuts off his alternative chance of employing himself.
The wage-earner of the new era would be in the following position:—
1.Neither he nor anyone else would pay taxes or rates.
2.He would continue to help, along with every other member of the community, to make particular sites more valuable than others. If he did not elect to use land he would not evade any duty to the public, nor would he receive any favour from those who did take it and who paid the equivalent rent. Such persons would make no sacrifice on his behalf, for they would get full value for their money.
3.He would have the "alternative chance" fully open to him. If he preferred, he could work for wages, or if he chose to use land he could do so by paying annually the assessed value of the piece which he selected. He would neither benefit nor lose by choosing either alternative in preference to the other.

But it is not only tenants and wage-earners who would find their incomes increased. The working proprietor is likely to come to see the desirability of introducing the system of assessing hind value only, and of excluding improvement value. This will probably be seen in reference to local rates before it will appear desirable in Colonial taxes. The greater concentration of improvements upon smaller areas in towns and cities will probably cause the dwellers therein to see it earlier than country settlers. It is for this reason very probable that the reform movement will mature first in the towns, then spread to the country districts, and then begin to reform Colonial finance.

A strong colouring is given to this conjecture by the action of the London County Council, which might reasonably have been expected to prove a Conservative body. So far from that, however, it has page 55 recognised that the great improvements carried out by the old Metropolitan Board of Works, with funds raised from the ratepayers, have greatly added to the values of the ground landlord. The Council has consequently promoted Bills in Parliament asking for power to charge half the cost of such improvements upon the landlord. These have been thrown out, and the Council has accordingly brought matters to a deadlock until public opinion on the point shall develop. If the resistance of Parliament is continued long enough, it is very probable that the eyes of the public will be sufficiently opened to enable it to grasp the fact that the whole cost should be paid by those who will ultimately reap the whole benefit. In their London Correspondent's letter, published by the New Zealand Herald on June 2, 1893, will be found this very significant sentence: "The London County Council has decided to postpone all improvements of the city not absolutely necessary until such change can be made in the incidence of municipal taxation as shall cause the ground landlord to bear his fair share of the burdens."

Since the above paragraph was written a cablegram has arrived, dated London, June 27, which reads as follows:—"In the House of Commons the Betterment Clause, in the London Improvements Bill, was carried by a majority of ninety-eight." There seems no reason to doubt the connection between the two allusions; and if this supposition is correct, it indicates a very marked advance in England in the method of dealing with the ground rent question.

It will surely not take long for all ratepayers to have their eyes opened to the injustice and the impolicy of assessing improvements for rating purposes. The rates are devoted to the maintenance of roads, to drainage, to lighting, and to other public services. These are amongst the advantages which enhance the value of bare land; that is, of land apart from improvements, or, as it is technically known in the Ballance Land Tax Act, "unimproved value of land." These public conveniences do not increase the value of a ratepayer's improvements at all, but only of his land. They add just as much to the value of the unused land alongside of him. The improving ratepayer is there-fore being levied upon for the benefit of speculators and landlords who don't make improvements. A very little consideration would convince most ratepayers of the soundness of this reasoning, and would therefore show them that it is just and wise for them to insist that rates s hall no longer fall upon improvements. Thanks to the 1891 assessment, made under the Act referred to, the figures are already in existence giving the separate values of land and of improvements throughout the Colony. The late difficulty, caused by the two values being lumped together in one sum, is therefore now removed, and it only requires that ratepayers should be resolved. "No rating of improvements!" should be the watchword of every man who exercises any form of industry.